The Influence of Company Performance, Institutional Ownership, Managerial Ownership toward Executive Compensation (Study on Infrastructure, Utilities, and Transportation Sector Companies Listed on Indonesia Stock Exchange (BEI) 2018)

Valentine Hanis Putri

Abstract


ABSTRACT

This study aims to determine the effect of company performance, institutional ownership, and managerial ownership on executive compensation. In this study, company performance is measured by Net Profit Margin (NPM) and Return on Equity (ROE). The data in this study were obtained from the company's annual report. Data collection uses a purposive sampling method for infrastructure, utility and transportation sector companies listed on the Indonesia Stock Exchange in 2018. The samples used in this study were 29 companies from 70 companies. The analytical method of this study uses multiple linear regression analysis. The results of this study indicate that the performance of companies that are positioned with ROE, managerial ownership has a positive effect on executive compensation. While the company's performance does not affect executive compensation when measured by the NPM proxy. The institutional ownership variable in this study shows that there is an influence on executive compensation but has an inverse relationship.

Keywords: Executive compensation, NPM, ROE, institutional ownership, managerial ownership.


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