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Executive compensation in government-linked companies: evidence from Malaysia

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  • Marizah Minhat
  • Mazni Abdullah

Abstract

The aim of this study was to explore the characteristics of executive pay, equity ownership incentives and pay--performance relationship in government-controlled firms. Data were hand-collected from the annual reports of 179 companies listed on Bursa Malaysia. The results show that executive pay is lower in government-linked companies. Positive pay--performance relationship is also not evident for this category of firms, which indicates that their executives were largely guaranteed with certain level of pay irrespective of performance. The level of equity ownership incentives provides the executives in government-controlled firms with very little incentive to produce effort that can improve firm performance. Overall, our findings are consistent with the inefficient pay hypothesis developed in this study.

Suggested Citation

  • Marizah Minhat & Mazni Abdullah, 2014. "Executive compensation in government-linked companies: evidence from Malaysia," Applied Economics, Taylor & Francis Journals, vol. 46(16), pages 1861-1872, June.
    • Handle: RePEc:taf:applec:v:46:y:2014:i:16:p:1861-1872
    DOI: 10.1080/00036846.2014.887192
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    Cited by:

    1. Ravichandran K. Subramaniam & Khakan Najaf & Murugasu Thangarajah, 2022. "Board Governance, Dividend Payout and Executive Compensation in Malaysian Firms," Capital Markets Review, Malaysian Finance Association, vol. 30(1), pages 17-35.

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