MODERATING ROLE OF LIQUIDITY ON EXECUTIVE EMOLUMENTS AND FINANCIAL PERFORMANCE OF LISTED HEALTHCARE FIRMS IN NIGERIA

Abstract

This study examined the moderating role of liquidity (LIQ) on executive emoluments and financial performance of listed healthcare firms in Nigeria. This study used non- probabilistic sampling technique to arrive at three healthcare firms out of seven listed healthcare firms for the study the period of 12years. Profit after tax (PAT) was employed as the dependent variable, executive emolument (EEM) was employed as independent variable of this study and firm size was adopted as the control, while LIQ was employed as the moderating variable of this study. STATA 13.0 was employed as the analytical tool.
The OLS result without moderator revealed that EEM is positively and insignificantly associated with PAT. However, with the introduction of the moderator LIQ, the result showed that executive emolument and liquidity is significantly and negatively correlated with PAT. This study concludes that LIQ is statistically and negatively associated with executive remuneration and PAT. This study recommends thus, that the remuneration committee should consciously make pay policy that will encourage the directors to put in more effort to promote firm value, because their efforts can improve the firm liquidity position.