Determinants of Executive Compensation in Zimbabwe: Evidence from Zimbabwe Stock Exchange Listed Companies (2009 To 2016)

The study sought to establish the determinants of executive compensation in Zimbabwe. The focus was on the factors that determine executive compensation for Zimbabwe Stock Exchange listed companies. The study was carried out to address the problem about companies that seemed to pay disproportionate executive remunerations. Studies reviewed indicated varying and sometimes contradicting results on the determinants of executive compensation. In this study 43 companies formed the active sample from a population of 65. The study used the quantitative research design. Data was collected from company annual reports that were obtained from company websites and the Zimbabwe Stock Exchange. A data collection instrument was developed to collect and prepare the data for analysis. The data was analysed using both descriptive and quantitative statistics. Descriptive statistics were used to explore the results. Quantitative statistics were used to analyse the relationships between the variables. The study found out that there is positive and significant relationship between executive compensation and revenue, EPS, and total assets. The study concluded that board size and board independence are not significant determinants of executive compensation. Based on the findings and conclusions the researcher recommended that companies should strengthen the pay-performance link.

Keywords: executive compensation, directors’ remuneration, Zimbabwe Stock Exchange, Zimbabwean companies.