Executive Compensation Design, Board Oversight Quality, and Long-Run Firm Performance: Panel Evidence from Nigeria’s Non-Financial Listed Sector

This study provides rigorous empirical evidence on the relationships among executive compensation design, board oversight quality, and long-run firm performance in Nigeria's non-financial listed sector, contributing to the growing but methodologically heterogeneous literature on compensation-governance-performance linkages in African capital markets. A comprehensive longitudinal panel dataset was constructed covering 70 non-financial listed firms over twelve years, merging compensation data from annual reports with governance quality scores derived from an original board effectiveness index. Dynamic panel data methods including the system generalised method of moments estimator were employed to address endogeneity and persistence in performance outcomes. The study innovates by constructing an executive compensation design quality index capturing not merely pay levels but alignment mechanisms including long-term incentive weighting, performance-conditionality rigour, and clawback provision adoption. Findings demonstrate that compensation design quality, as distinct from raw compensation levels, exerts significant positive long-run performance effects mediated by board oversight quality. Firms with high compensation design quality but low board oversight show performance patterns consistent with managerial opportunism, suggesting complementarity rather than substitutability between compensation and governance mechanisms. These findings advance agency theory by demonstrating the interaction effects between compensation design and oversight quality as co-determinants of long-run value creation, with direct implications for the Securities and Exchange Commission's ongoing governance code reforms in Nigeria. Keywords: executive compensation, board oversight, firm performance, panel data, Nigerian listed firms.