ABSTRACT

 This study examined the impact of director's remuneration on commercial banks’ performance in Nigeria. The study used stratified and purposive sampling technique to select ten out of the population of twenty one banks. The ordinary least squares method of multiple regression was used to analyze the data for this study which were obtained from the annual reports of the selected banks covering a period of fifteen years from 2000-2014. Profit after tax and return on equity were used as dependent variables for the various hypotheses stated in this study and the independent variables comprised of executive director’s remuneration, non executive director’s remuneration, salaries and wages, and pension costs. The findings of the research indicated that executive directors’ remuneration had a positive and significant impact on commercial banks’ performance in Nigeria, while non executive director’s remuneration had no impacts on banks’ performance, salaries and wages and pension costs both had positive and significant impact on banks’ profit after tax. The study therefore recommended, among others that performance based pay system should be implemented in the banks, so as to ensure that hard work and commitment are encouraged among bank directors. This implies that directors’ remuneration should be closely tied to the level of contribution towards overall performance of the bank. Also corporate shareholders should engage in director tailored wages and reward system that is not just salvation wages for the directors but should be relatively sufficient, to attract and maintain individuals with top management skills in the Nigerian banking system.