CEO Compensation and SMEs Performance: A Structural Equation Modelling Approach from Jordanian Listed SMEs

Authors

  • Abbas Saad Hamada Alkhuzaie University of Al-Qadisiyah
  • Alaa Zuhair Mansour Arab Open University
  • Marwan Altarawneh Arab Open University
  • Alya Elfedawy Arab Open University

DOI:

https://doi.org/10.5296/ber.v14i1.21478

Abstract

This study's main goal is to discover whether the CEO's cash comparison affects SMEs' performance, with the bonus having a favorable impact instead. The research comprises an analysis of the SMEs mentioned in the Jordanian Ministry of Industry and Trade. To test hypotheses, data were meticulously collected from a sample of 80 SMEs in Amman, Jordan, a pivotal business hub in the country. Utilizing Structural Equation Modelling through Smart PLS 3, our chosen methodological framework facilitated a comprehensive analysis of the intricate relationships between CEO compensation variables and SME performance. The study's conclusions show a substantial correlation between the performance of SMEs included and the components of CEO compensation in the Jordanian Ministry of Industry and Trade. Despite this, it has been discovered that a few additional incentive factors significantly improve performance in SMEs. This study has shown that some incentive contract theories are appropriate for businesses with specific sizes and operating in particular industries.

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Published

2024-03-01

How to Cite

Hamada Alkhuzaie, A. S., Mansour, A. Z., Altarawneh, M., & Elfedawy, A. (2024). CEO Compensation and SMEs Performance: A Structural Equation Modelling Approach from Jordanian Listed SMEs. Business and Economic Research, 14(1), 57–71. https://doi.org/10.5296/ber.v14i1.21478

Issue

Vol. 14 No. 1 (2024)

Section

Articles

License

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.