Executive director remuneration and related party transactions (Rpts): Evidence from Malaysia

Mohd Mohid Rahmat, Syaiful Baharee Jaafar

Research output: Contribution to journalArticle

Abstract

This study examines the association between executive director remuneration, including different types and bases (cash and non-cash) and related-party transactions (RPTs) among listed companies in Malaysia. The hypotheses are tested using a sample of 539 companies over the period 2012-2014 with a total of 1,615 observations. The results show that executive director remuneration either cash or non-cash is effective at reducing firm’s engagement in RPTs. Executive directors favor the combination of remuneration packages, either involving salary and fee, or salary and in-kinds rather than fee or salary alone. The evidence provides a greater understanding of the association between executive director compensation and managing director’s opportunistic dealing involving related parties. Regulators and policy makers must concern a vital of the attractive director remuneration to minimize the expropriation risk through RPTs.

Original languageEnglish
Pages (from-to)301-323
Number of pages23
JournalInternational Journal of Business and Management Science
Volume8
Issue number2
Publication statusPublished - 1 Jan 2018

Fingerprint

Malaysia
Related party transactions
Remuneration
Salary
Cash
Fees
Politicians
Listed companies
Director compensation
Expropriation

Keywords

  • Agency conflict
  • Conflict of interest
  • Director remuneration
  • Related party transactions

ASJC Scopus subject areas

  • Business and International Management
  • Economics and Econometrics

Cite this

Executive director remuneration and related party transactions (Rpts) : Evidence from Malaysia. / Rahmat, Mohd Mohid; Jaafar, Syaiful Baharee.

In: International Journal of Business and Management Science, Vol. 8, No. 2, 01.01.2018, p. 301-323.

Research output: Contribution to journalArticle

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