Executive Compensation in Nigerian Banks : Regulations or Just More Disclosures?

Researchers have argued that executive compensation in the financial institutions has led executives to take excessive risk which in turn led to the global financial crisis. In an attempt to resolve this anomaly, many countries both advanced and developing have made changes to either their corporate governance code or restrict executive compensation to discourage excessive risk taking. This paper therefore attempts to carry out an analytical study, through content analysis, of the concept of Executive Compensation Regulation in banks and how countries are regulating executive compensation to minimise excessive compensation and risk taking. The paper thereafter compare the regulation in Nigeria and other countries to determine to what extent executive compensation for banks in Nigeria can minimise excessive compensation and risk taking. The paper found that the regulation of executive compensation for banks in Nigeria has not met the global best practice in designing such regulations as it is limited to disclosures without specific regulations on pay structures. The paper recommends among others the need for CBN to review the present code to reflect global best practice