Executive tunnelling and financial performance of mortgage banks in Nigeria
DOI:
https://doi.org/10.33003/fujafr-2026.v4i3.429.467-479Keywords:
Executive Tunnelling, Executive compensation intensity, Executive compensation burden, Financial Performance, Mortgage BanksAbstract
Purpose: The study examined the relationship between executive tunnelling and the financial performance of mortgage banks in Nigeria.
Methodology: The study employed panel data covering the period 2016 to 2025 and applied the random-effects panel regression model to examine the effects of executive compensation intensity (ECI) and executive compensation burden (ECB) used as measures for executive tunneling on return on assets (ROA), used as measure for financial performance.
Results and Conclusion: The results showed a strong inverse relationship between ECI and financial performance, suggesting that higher compensation intensity was linked to lower mortgage bank financial performance. ECB, on the other hand, showed a strong positive correlation with financial performance, indicating that more expansive executive compensation plans were linked to higher performance.
Implication of Findings: In general, the study established that the financial implications of executive tunnelling were not uniform but depended on the specific dimension of executive compensation considered. The results emphasized how crucial it is to carefully design executive compensation plans and bolster governance frameworks in order to guaranty that executive rewards are in line with long-term mortgage banks performance. The study came to the conclusion that Nigeria mortgage banking industry should receive more attention on the composition, transparency, and performance orientation of her executive compensation.
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