The Impacts of Corporate Governance and Dividend Payout Policy Toward Managerial Compensation: Evidence on Malaysia Top 100 Listed Companies.

xviii CHAPTER 1: RESEARCH OVERVIEW 1.0 Introduction . 1 1.1 Research Background . 1 1.1.1 Overview on Managerial Compensation . 1 1.1.1.1 Compensation Package in Malaysia . 3 1.1.2 Overview on Corporate Governance . 5 1.1.2.1 Overview on Board Independence . 8 1.1.2.2 Overview on Board Size . 10 1.1.2.3 Overview on CEO Duality . 11 1.1.2.4 Overview on CEO Ownership . 13 The Impacts of Corporate Governance and Dividend Payout Policies toward Managerial Compensation: Evidence on Malaysia Top 100 Companies vii 1.1.3 Overview on Dividend Payout Policies . 14 1.2 Problem Statement . 16 1.3 Research Objectives . 19 1.3.1 General Objective . 19 1.3.2 Specific Objectives . 19 1.4 Research Questions . 20 1.5 Hypothesis of the Study . 20 1.6 Significance of Study . 21 1.7 Chapter Layout . 23 1.8 Conclusion . 24 CHAPTER 2: LITERATURE REVIEW 2.0 Introduction . 25 2.1 Review of Literature . 25 2.1.1 Board Independence and Managerial Compensation . 25 2.1.2 Board Size and Managerial Compensation . 28 2.1.3 CEO Duality and Managerial Compensation . 29 2.1.4 CEO Ownership and Managerial Compensation . 32 2.1.5 Dividend Payout and Managerial Compensation . 34 2.1.6 Company Profitability and Managerial Compensation. 37 2.1.7 Company Size and Managerial Compensation . 39 2.2 Reviews on Relevant Theoretical Models . 42 2.2.1 Agency Theory and Managerialism . 42 2.2.2 Marginal Productivity Theory. 44 2.3 Proposed Theoretical Framework . 46 The Impacts of Corporate Governance and Dividend Payout Policies toward Managerial Compensation: Evidence on Malaysia Top 100 Companies viii 2.4 Hypothesis Development . 47 2.4.1 Board Independence and Managerial Compensation . 47 2.4.2 Board Size and Managerial Compensation . 47 2.4.3 CEO Duality and Managerial Compensation . 47 2.4.4 CEO Ownership and Managerial Compensation . 48 2.4. 5 Dividend Payout and Managerial Compensation . 48 2.5 Conclusion . 49 CHAPTER 3: METHODOLOGY 3.0 Introduction . 50 3.1 Research Design. 50 3.2 Data Collection Model . 51 3.3 Sampling Design . 53 3.3.1 Target Population . 53 3.3.2 Sampling Technique . 55 3.3.3 Sampling Size . 56 3.4 Data Processing . 57 3.4.1 Dependent Variable Specification . 58 3.4.1.1 Managerial Compensation . 58 3.4.2 Independent Variable Specification . 59 3.4.2.1 Board Independence. 59 3.4.2.2 Board Size . 59 3.4.2.3 CEO Duality. 60 3.4.2.4 CEO Ownership . 60 3.4.2.5 Dividend Payout. 61 The Impacts of Corporate Governance and Dividend Payout Policies toward Managerial Compensation: Evidence on Malaysia Top 100 Companies ix 3.4.3 Control Variables Specification . 61 3.4.3.1 Company Profitability . 61 3.4.3.2 Company Size . 62 3.5 Data analysis . 62 3.5.1 Panel Data Technique . 63 3.5.1.1 Pooled OLS Model . 66 3.5.1.2 Fixed Effect Model . 67 3.5.1.3 Random Effect Model . 68 3.5.1.4 Poolibility Hypothesis Test . 69 3.5.1.5 Breusch-Pagan Lagrange Multiplier Test . 70 3.5.1.6 Hausman Test. 71 3.6 Diagnostic Test . 71 3.6. 1 Normality . 72 3.6. 2 Multicollinearity . 73 3.6. 3 Autocorrelation . 75 3.7 Conclusion . 76 CHAPTER 4: DATA ANALYSIS 4.0 Introduction . 77 4.1 Descriptive Analysis . 77 4.1.1 Managerial Compensation . 79 4.1.2 Board Independence. 80 4.1.3 Board Size . 80 4.1.4 CEO Duality. 82 4.1.5 CEO Ownership . 82 The Impacts of Corporate Governance and Dividend Payout Policies toward Managerial Compensation: Evidence on Malaysia Top 100 Companies x 4.1.6 Dividend Payout. 83 4.1.7 Company Profitability . 84 4.1.8 Company Size . 85 4.2 Panel Data Analysis . 86 4.2.1 Poolability Test . 86 4.2.2 Breusch-Pagan Lagrange Multiplier Test . 87 4.2.3 Hausman Test. 87 4.3 Diagnostic Checking . 88 4.3.1 Normality Test . 88 4.3.2 Multicollinearity . 90 4.3.3 Autocorrelation . 96 4.4 Inferential Analyses . 97 4.4.1 Empirical Result. 97 4.4.2 R-square . 98 4.4.3 Adjusted R-square . 99 4.4.4 F-statistics . 99 4.4. 5 t-statistics . 100 4.4. 5.1 Board Independence. 100 4.4. 5.2 Board Size . 101 4.4. 5.3 CEO Duality. 102 4.4. 5.4 CEO Ownership .