EXECUTIVE COMPENSATION, EMPLOYEE TRUST & FINANCIAL PERFORMANCE OF SELECTED GPTW-CERTIFIED COMPANIES IN NIGERIA

A significant shift in workplace culture across different jurisdictions, as well as in the employeremployee relationship, has brought the subject of employee trust in management as a determinant of firm performance under the searchlight of researchers. While extensive work had earlier been done, and research are still ongoing on the significance of executive compensation in improving a firm’s financial performance, an attempt to combine the effects of executive compensation and employee trust to highlight the influence of leader-employee dynamics is unprecedented in literature. Therefore, the aim of this study is to investigate the relationship between executive compensation and employee trust in management on the financial performance of selected GPTW-Certified companies in Nigeria. Cross-sectional data were extracted from both the audited financial statements of the selected firms and the database of the GPTW Institute. The analysis revealed an inverse relationship between executive compensation and financial performance of firms, indicating that higher executive compensation does not necessarily translate to improved financial performance while a positive association between employee trust and financial performance was also found, indicating that when employees trust their managers, their productivity increases and the firm’s financial performance improves.