An Investigation of Executive Compensation and Firm Performance in Nigerian Telecommunications Firms: A Case Study of Globacom in Kaduna State
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Background of the Study
Executive compensation is a critical aspect of corporate governance, as it directly influences managerial behavior and organizational performance. In the Nigerian telecommunications industry, the relationship between executive pay and firm performance has sparked considerable debate (Adeyemi & Bello, 2024). Critics argue that excessive compensation packages often lack alignment with performance metrics, leading to inefficiencies and shareholder dissatisfaction.
Globacom, one of Nigeria’s leading telecommunications firms, operates in a highly competitive environment characterized by rapid technological advancements and dynamic consumer preferences. The company’s executive compensation policies have come under scrutiny, with stakeholders questioning their effectiveness in driving firm performance (Ibrahim & Musa, 2025).
Research indicates that a well-structured compensation framework that aligns with organizational goals enhances productivity and profitability (Okonkwo et al., 2023). However, the absence of transparency and accountability in compensation practices remains a challenge in Nigeria’s corporate landscape. This study seeks to investigate the impact of executive compensation on firm performance in Globacom, with a focus on its operations in Kaduna State.
Statement of the Problem
The misalignment between executive compensation and firm performance is a persistent issue in Nigeria’s telecommunications sector. Studies reveal that excessive executive pay often lacks justification, resulting in stakeholder dissatisfaction and poor organizational outcomes (Eze et al., 2024). Globacom, despite its market leadership, faces criticism regarding the effectiveness of its compensation policies in driving firm performance.
This problem is further compounded by the lack of standardized performance evaluation criteria and weak regulatory oversight. As a result, stakeholders are increasingly demanding greater transparency and accountability in compensation practices (Bello, 2023). This study aims to address these concerns by examining the relationship between executive compensation and firm performance, identifying gaps, and proposing solutions for improvement.
Objectives of the Study
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To analyze the executive compensation practices of Globacom in Kaduna State.
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To examine the relationship between executive compensation and firm performance in the telecommunications sector.
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To identify challenges in aligning executive pay with organizational goals and propose recommendations.
Research Questions
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What are the executive compensation practices of Globacom in Kaduna State?
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How does executive compensation influence firm performance in the telecommunications industry?
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What challenges hinder the alignment of executive pay with organizational goals, and how can they be addressed?
Research Hypotheses
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There is no significant relationship between executive compensation and firm performance in Globacom.
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Executive compensation practices do not significantly influence employee productivity in the telecommunications sector.
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The challenges in aligning executive pay with organizational goals cannot be effectively addressed by existing policies.
Scope and Limitations of the Study
The study is limited to the executive compensation practices of Globacom in Kaduna State and their impact on firm performance. While it provides valuable insights into the telecommunications sector, the findings may not be applicable to other industries or regions. Data access and confidentiality constraints may also limit the depth of analysis.
Definitions of Terms
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Executive Compensation: Financial and non-financial rewards given to senior management for their contributions to organizational performance.
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Firm Performance: The ability of a company to achieve its financial and operational goals.
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Telecommunications Industry: The sector responsible for providing communication services, including voice, data, and internet connectivity.
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