Thesis (MBA)--Stellenbosch University, 2014. / ENGLISH ABSTRACT: Executive remuneration in South Africa has continued to attract public outrage and generate much
debate among various stakeholders due to the perceived non-alignment of compensation
packages awarded to senior executives and company performance. This research examines the
relationship between executive compensation and financial performance of South African listed
companies. Furthermore, the study investigates the link between executive pay and sustainability
performance measures such as environmental, social and governance (ESG) criteria. Almost no
research has been done in South Africa to examine the link and integration of ESG performance
metrics into executive pay as researchers continue to focus on traditional financial measures of
performance such as earnings (EBITDA), earnings per share (EPS), return on equity (ROE), return
on assets (ROA), total shareholder return (TSR) and share price. The link between executive
compensation and sustainability metrics (ESG) has become a topic of much discussion among
academics and investors due to the potential influence of ESG factors on companies’ financial
performance and sustainable long-term value creation. The research begins by examining the
changes in the level of executive compensation during a five-year period and by testing the
relationship between executive pay and traditional financial performance measures. The results
show that the total compensation of CEOs has been steadily increasing during the five-year period
while variable performance bonuses experienced a slight decline during the economic recession of
2007 to 2008. The results provided evidence that there is a statistically significant positive
relationship between executive remuneration and company profitability. Findings for the second
objective suggest that while executive compensation plans of many companies have been formally
tied to ESG performance metrics, few companies in the study have disclosed effective and robust
ESG performance measurement systems that tie executive pay to sustainability performance.
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:sun/oai:scholar.sun.ac.za:10019.1/97417 |
| Date | 04 1900 |
| Creators | Kuboya, Daniel |
| Contributors | Malan, Daniel, Stellenbosch University. Faculty of Economic and Management Sciences. Graduate School of Business. |
| Publisher | Stellenbosch : Stellenbosch University |
| Source Sets | South African National ETD Portal |
| Language | en_ZA |
| Detected Language | English |
| Type | Thesis |
| Format | x, 78 pages |
| Rights | Stellenbosch University |
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