Impact of CEO Ownership on Financial Performance: Evidence from Nigerian Listed Firms

Abstract

This study investigates the impact of CEO ownership on financial performance among Nigerian listed firms from 2016 to 2022. The study population encompasses all the 157 companies listed on the Nigerian Exchange Group (NGX) as of January 2023. Employing census filtering criteria, a total of 94 companies qualifies as the sample for the study, contributing 658 firm-year observations over the seven years. Secondary data is extracted from the annual reports and accounts of the selected companies, covering the period from 2016 to 2022. The study utilized descriptive, correlation, and panel corrected standard error (PCSE) analyses to examine the data collected. The findings reveal a significant positive association between CEO ownership and financial performance, indicating that higher CEO ownership levels are associated with improved firm outcomes. This underscores the importance of aligning managerial incentives with shareholder interests to drive sustainable value creation. The results highlight the critical role of robust corporate governance mechanisms in fostering accountability and enhancing shareholder wealth within the Nigerian corporate landscape. To capitalize on these findings, policymakers, regulators, and stakeholders are urged to prioritize governance frameworks that promote CEO ownership and transparency. Moreover, future research directions are outlined, emphasizing the need for deeper exploration of the mechanisms underlying CEO ownership's influence on financial performance and comparative studies across diverse emerging market contexts. Through these endeavors, this study contributes to advancing our understanding of corporate governance dynamics and informing evidence-based policy interventions tailored to the needs of evolving market environments.