Share-based Compensations of Selected Nigerian Banks at Pre and Post-Consolidation Era

Abstract

The study investigated share-based compensations to shareholders in the Nigerian banking sector. The major consolidation reform took effect in 2005. The pre-consolidation period covered the period before 2004 while the post-consolidation era covered the period after 2005. The sample comprised bank officers of four banks in Nigeria.  The audited financial statements of the four selected banks covering the periods of 2002 to 2008 were analyzed. A questionnaire was also designed to elicit information from 33 bank staff randomly selected from the four selected quoted Banks in Nigeria and 60 stakeholders. Participants were required to provide their views on share-based using the questionnaire. A research hypothesis was formulated and tested using the t-test statistics tool at 0.05 alpha level of significance. The findings of the study revealed some differences in the share-based compensations to the shareholders before and after the 2005 bank consolidation exercise in Nigeria. However, no significant difference was found in the observations of respondents as regards share-based compensations to shareholders at pre and post consolidation era.  Based on the findings of the study, it was recommended that the banking sector should ensure that its operations are carried out in a more transparent manner in order to encourage better investment and promote accountability.

Keywords: Share-based Compensation, Banks, Nigeria