This study examines the effect of top executive compensation on the financial performance of Nigerian banks using causal research design. Documentary data was generated from the financial reports and accounts of the sampled banks. Panel data analysis was used to analyze the compensation-performance impact of nine banks (both old and new generations) over five year period. The study found a positive and significant link between executive compensation and the profit before tax of the sampled banks (a key explanatory variable). The policy implication of this conclusion is that banks in Nigeria should consolidate and strengthen their top compensation structure with the use of incentive plans.
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