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The Role of Financial Compensation Oversight Committees in Improving the Financial Performance Governance of Saudi Banks

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Listed:
  • Ibrahim Ahmed Elamin Eltahir

    (Department of Business Administration, Jouf University, Sakakah 72311, Saudi Arabia
    Department of Business Administration, Omdurman Islamic University, Omdurman 14411, Sudan)

  • Mozamil Awad Taha

    (Accounting Department, College of Business Administration, Taif University, Taif 26311, Saudi Arabia)

  • Nasareldeen Hamed Ahmed Alnor

    (Accounting Department, College of Business, Jouf University, Sakakah 72311, Saudi Arabia
    Accounting Department, College of Business Studies, Sudan University of Science and Technology, Khartoum 11111, Sudan)

  • Salih Hamid Adam

    (Accounting Department, College of Business Administration, Taif University, Taif 26311, Saudi Arabia)

  • Eltayeb Hamid Edres Musa

    (Department of Accounting, College of Administrative Sciences, Shaqra University, Shaqra 15551, Saudi Arabia
    Department of Accounting, Omdurman Islamic University, Omdurman 14411, Sudan)

Abstract

This study looks at how oversight committees affect CEO compensation governance and how this affects publicly traded banks’ financial performance. It specifically looks at how compensation committee mandates and structural traits affect how CEO compensation is matched to company performance results. The research employs a panel dataset of sample firms across the study period, combining financial performance metrics like return on equity (ROE) and return on assets (ROA). It draws on agency theory and corporate governance theories. In addition to firm-level controls, the research takes into account committee-level factors such independence, experience, frequency of meetings, and ownership. The findings obtained through panel regression methods and testing show that improved pay-performance sensitivity and improved financial performance do not correlate with committee influence, independence, or financial expertise. The importance of empowered oversight committees in reducing interagency conflicts of interest and fostering efficient governance is demonstrated by these findings. By emphasizing how internal governance frameworks can be used to produce long-term organizational goals, the study adds to the discussion surrounding executive compensation.

Suggested Citation

  • Ibrahim Ahmed Elamin Eltahir & Mozamil Awad Taha & Nasareldeen Hamed Ahmed Alnor & Salih Hamid Adam & Eltayeb Hamid Edres Musa, 2025. "The Role of Financial Compensation Oversight Committees in Improving the Financial Performance Governance of Saudi Banks," JRFM, MDPI, vol. 18(9), pages 1-14, September.
    • Handle: RePEc:gam:jjrfmx:v:18:y:2025:i:9:p:514-:d:1750190
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    References listed on IDEAS

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    1. Caroline Flammer & Bryan Hong & Dylan Minor, 2019. "Corporate governance and the rise of integrating corporate social responsibility criteria in executive compensation: Effectiveness and implications for firm outcomes," Strategic Management Journal, Wiley Blackwell, vol. 40(7), pages 1097-1122, July.
    2. Kalin D. Kolev & David B. Wangrow & Vincent L. Barker & Donald J. Schepker, 2019. "Board Committees in Corporate Governance: A Cross‐Disciplinary Review and Agenda for the Future," Journal of Management Studies, Wiley Blackwell, vol. 56(6), pages 1138-1193, September.
    3. Maleen Z. Gong & Nava Subramaniam, 2020. "Principal leadership style and school performance: mediating roles of risk management culture and management control systems use in Australian schools," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 60(3), pages 2427-2466, September.
    4. Randa Abd Elhamied Mohammed Hamza & Nasareldeen Hamed Ahmed Alnor & Mohamed Ishag Abdelrahman Eisa & Adeeb Alhebri & Ibrahim Ahmed Elamin Eltahir, 2025. "The influence of electronic payment methods on tax compliance," International Journal of Innovative Research and Scientific Studies, Innovative Research Publishing, vol. 8(2), pages 3046-3055.
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