The Impact of Executive Compensation on the Relationship Between Board Characteristics and Performance of Companies Listed on The Stock Exchange of Thailand
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Abstract
This research aims to 1) study the impact of board characteristics and executive compensation on the performance of listed companies in the Stock Exchange of Thailand and 2) study the influence of executive compensation on the relationship between board characteristics and the performance of listed companies in the Stock Exchange of Thailand. The quantitative research design utilized secondary data from 503 companies, resulting in 2,515 data points collected between 2019 and 2023 from annual reports, financial statements (56-1), and SETSMART. Descriptive and inferential statistics were used, including Pearson correlation coefficient analysis and multiple regression analysis. The results of the research found that 1) the main impact of board characteristics on the size of the board of directors had an adverse effect on performance, indicating that the size of the board of directors was too large and harmed performance due to delayed decision-making and a lack of flexibility. Meanwhile, the proportion of independent directors, accounting and finance experts, and the number of meetings did not affect performance. Executive compensation had a positive effect on performance by helping to stimulate efficiency and better results. 2) Executive compensation influenced the relationship between board characteristics and the proportion of independent directors, indicating that executive compensation encouraged executives to implement effective strategies and helped reduce the problem of too large a board of directors. However, compensation did not affect directors who were experts in accounting and finance, nor did it impact the number of meetings, as the overall role focuses on internal controls and meeting processes rather than financial incentives.
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