Executive Compensation and Agency Conflicts in Nigerian Insurance Companies: Evidence from the South South Zone

This study examines executive compensation structures and their relationship with agency conflicts in selected Nigerian insurance companies operating in the South South geopolitical zone. Agency theory posits that misalignment between managerial incentives and shareholder interests creates conflicts that can result in suboptimal firm outcomes. In the Nigerian insurance sector, concerns have emerged regarding excessive executive pay relative to firm performance, prompting scrutiny from the National Insurance Commission. This study evaluates how compensation components, including base salary, performance bonuses, and stock options, relate to indicators of agency conflict such as earnings manipulation, asset tunnelling, and dividend withholding. A descriptive research design is employed, using secondary data from annual reports of twelve insurance firms over four years. Data are analysed using descriptive statistics and panel regression, with firm size and leverage as control variables. The study expects to find that performance-linked compensation components are negatively associated with agency conflicts, while fixed salary dominance correlates with increased conflict indicators. Findings will assist the National Insurance Commission and board remuneration committees in designing more effective compensation frameworks that align management interests with those of shareholders. This research adds to the limited empirical work on governance in the Nigerian insurance industry within the South South region. Keywords: executive compensation, agency conflicts, insurance companies, corporate governance, South South Nigeria.