Director remuneration and performance in Malaysia family firms: an expropriation matter?

This study examines the relationship between director remuneration and performance in Malaysia family firms. The proxies of director remuneration include fees, salary, bonuses, and benefits of kin. The proxy for family firm is a dummy variable that is one (1) if the firm is a family firm and zero (0) is a non-family firm. The dependent variable (performance) is measured by ROA and ROE. A panel analysis of 537 firms from 2007 and 2009 finds that the relationship between director remuneration and performance is significantly positive. This suggests that the remuneration driven board motivation to enhance performance. Furthermore, this study does not find evidence the family firm manipulated a power and control for personal wealth

Remuneration, remuneration committee, institutional investor and performance in family firms: evidence from Malaysia public listed companies

The Malaysian Code on Corporate Governance (MCCG) is part of the Bursa Malaysia Listing Rules to ensure good governance in the capital market. This study investigates two important elements of MCCG; directors’ remuneration and the characteristics of remuneration committees which give recommendations on directors’ pay. However, the proposal needs to be monitored by either a non-executive or an institutional investor, or both, especially in family firms. According to the structure of a family firm, the same person is often on the board of directors and the remuneration committee. This thesis examines the relationship between remuneration and performance in family firms, represented by the remuneration committee and the institutional investors for 537 Bursa Malaysia listed firms from 2007 to 2009. This study finds evidence to support the hypothesis that directors’ remuneration has a significant and positive relationship with firm performance. However, this study did not find evidence that family firms influence the relationship between remuneration and performance. Also, the study finds that the presence of institutional investors is positively related to firm performance. However, there is no evidence showing that institutional investors influence the relationship between remuneration and performance in family firms. With regards to the remuneration committee, this study finds that family firms’ connections with remuneration committees has a negative relationship. Also, the study finds that the relationship between remuneration committees and remuneration is significantly negatively affected in family firms. This shows that the relationship between the remuneration committee and remuneration is dependent on the family firms. Furthermore, there is no evidence that institutional investors effectively monitor remuneration committees during remuneration in family firms. Thus, this study suggests that the relationship between remuneration committees and the remuneration directors of family firms does not depend on the institutional investor role

Director Remuneration Pay: Trends During and After the Financial Crisis of 2007 to 2009

The objective of this study is to examine the trends of director remuneration in Malaysia’s publicly listed companies. The proxies for executive pay are based on cash remuneration consisting of fees, salary, bonuses, and benefits to kin. Based on the data collected from 486 publicly listed companies in Bursa Malaysia from 2007 to 2009, we empirically tested findings that the trends for remuneration increased during and after the financial crisis. The study also reveals that the structure of remuneration, such as salary and bonuses for executives, showed an increasing trend during and after the financial crisis; however, it shows that the trend of director remuneration in family firms after the financial crisis was decreasing. Further analysis indicates that family members were willing to accept lower fees, bonuses, and benefits to kin in order to maintain cash flow. Our study suggests that no expropriation existed in family firms during and after the financial crisis. However, executives in non-family firms are less interested in accepting lower remuneration as part of a contract