The Effect of Financial Resources on Executive Remuneration: Evidence from IDX 30 Companies at the Indonesian Stock Exchange
Widayanto (a*), Mone Stepanus Andrias (b)

Faculty of Economics and Business
Universitas Indonesia

Abstract

This study aims to examine the impact of financial resources, i.e., assets, revenue, and profit on executive (board of directors and commissioner) remuneration. The data was retrieved from a listed company on Indonesia Stock Exchange 2016 - 2020. The listed companies as research samples are those under the category of IDX 30. IDX 30 is an index consisting of 30 companies that have high liquidity and large capitalization underpinned by strong fundamentals. We run a multiple regression method to analyze the data. The research finding shows that assets and revenue significantly impact executive remuneration. However, the company^s net profit does not significantly impact executive remuneration. This study suggests that the highest-level decision maker in the company use assets and revenue as predictive factors when determining executive remuneration.

Keywords: Executive Remuneration, Financial Resources, IDX 30. Indonesia Stock Exchange.

Keywords: Executive remuneration, financial resources, IDX 30, Indonesia Stock Exchange.

Topic: Organizational Behavior, Leadership and Human Resource Management