Determinant of Executive Compensation (Evidence from Indonesian Banking)

Abstract

The Covid-19 pandemic, in addition to having an impact on Indonesia's economic growth which is a minus, also has a negative impact on almost all industrial sectors in Indonesia. One of the industrial sectors under pressure is the banking sector. The decline in the performance of the banking company will affect the company's profitability. There are many things that will be done by the principal to make efficiencies related to all kinds of expenses, one of the components that can be reviewed is the amount of executive compensation. This study aims to analyze the effect of ROA, credit growth, growth of third-party funds, NPLs, and Covid-19 on the amount of executive compensation for banking companies listed on the Indonesia Stock Exchange in 2018 to 2021. This research is a quantitative study that uses the puposive sampling method. The results of the study found that ROA, credit growth, and company size were able to influence the amount of executive compensation for banking companies in Indonesia. Meanwhile, the growth of deposits, NPLs, and the Covid-19 pandemic did not affect the amount of executive compensation for banking companies in Indonesia.