Journal of Global Economics, Management and Business Research

REMUNERATION COMMITTEE’S IMPACT ON FIRM DIVIDENDS IN MALAYSIA: A PANEL APPROACH

MEYSAM SAFARI *

Graduate School of Business, SEGi University, Malaysia [MS]

*Author to whom correspondence should be addressed.

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Abstract

This study investigates the remuneration committee and its specifications, and their relations to the dividends behavior of the firm. The corporate governance – i.e. existence of remuneration committee, number of independent members of committee, remuneration committee size, CEO or General Manager’s membership in the committee, and size of board of directors – showed to be relevant in dividend policy decision of the firm in Malaysia. The analyses were conducted separately on both dividends per share and dividend yields. Data set includes a panel of 52 non-banking companies listed in Bursa Malaysia for the period of 2001 to 2010. Results indicate that all above mentioned corporate governance variables have significant impact on the dividend per share paid by firms. Similarly, for dividend yields, except the existence of remuneration committee variable, others show a significant effect. Hence, one may conclude a systemic relation between corporate governance mechanisms embodied in a firm and its payout policy in Malaysia.

Keywords: Dividends, corporate governance, remuneration committee, board of directors, Malaysia

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