IDEAS home Printed from https://ideas.repec.org/a/bjz/ajisjr/2370.html
   My bibliography  Save this article

Special Treatment to Bank CEOs in Indonesia

Author

Listed:
  • Sawidji Widoatmodjo
  • Ignatius Roni Setyawan

Abstract

The bank still plays the main role as a funding source in Indonesia. Because of that, they are securing the bank's position and showing its best performance become very important. A Special treatment for bank CEOs is one way. This study wants to answer the question of whether that way is sufficient. The special treatment is the CEO compensation, in the form of CEO salary as the main variable and CEO tenure and insider holding as the control variables. Other control variables are financial ratios: debt-to-equity ratio, lesser prudence, and loan-to-deposit ratio. All variables are associated with bank performance consisting of four variables: net interest margin, return on assets, return on equity, and cash flow to assets. By operating the OLS (ordinary least square), this research shows that CEO compensation in the form of salary has a negative effect on banks’ performance. However, another form of CEO compensation, the insider holding, positively influence on cash flow to assets. These results indicate that salary does not stimulate bank CEOs to do their best, whereas bank CEOs perform well when they also act as insider holders.

Suggested Citation

  • Sawidji Widoatmodjo & Ignatius Roni Setyawan, 2023. "Special Treatment to Bank CEOs in Indonesia," Academic Journal of Interdisciplinary Studies, Richtmann Publishing Ltd, vol. 12, March.
    • Handle: RePEc:bjz:ajisjr:2370
    DOI: https://doi.org/10.36941/ajis-2023-0037
    as

    Download full text from publisher

    File URL: https://www.richtmann.org/journal/index.php/ajis/article/view/13239
    Download Restriction: no
    File URL: https://www.richtmann.org/journal/index.php/ajis/article/view/13239/12829
    Download Restriction: no
    File URL: https://libkey.io/https://doi.org/10.36941/ajis-2023-0037?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bjz:ajisjr:2370. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Richtmann Publishing Ltd (email available below). General contact details of provider: https://www.richtmann.org/journal/index.php/ajis .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.