EXECUTIVE COMPENSATION AND INCENTIVES AND CORPORATE PERFORMANCE OF LISTED INSURANCE COMPANIES IN NIGERIA

Abstract

mechanisms on the financial performance of listed insurance companies in Nigeria over the period 2015–2024. Anchored on the agency theory, the research explored how executive pay structures influence profitability and value creation in the insurance sector. The study employed panel data from 15 listed insurance firms, with 150 firm-year observations analyzed using the Panel Least Squares (PLS) regression model under the random effects specification, as confirmed by the Hausman test results. Findings reveal that both total executive compensation and incentive-based pay exert positive but statistically insignificant effects on financial performance, measured by Return on Assets (ROA) and Return on Equity (ROE). This indicates that while executive rewards may contribute marginally to improved managerial performance, their current structure does not strongly drive profitability. The study concludes that executive compensation frameworks in Nigeria’s insurance industry lack sufficient performance sensitivity. It therefore recommends a shift toward performance-linked remuneration systems, enhanced governance oversight, and stricter regulatory policies by the National Insurance Commission (NAICOM) to promote accountability and value-driven compensation practices