Sample of this study is selected from the top 15
companies in the order of market capitalization and listed in Colombo Stock
Exchange excluding financial and insurance companies.
This study has not carried out for a particular
industry and findings can differ between industries. Further this research is
not relevant to the firms providing financial services.
Published annual reports from the companies listed
are selected and in that case findings of the research are limited to the
listed companies in the Colombo Stock Exchange.
As well external factors effecting the performance
of a firm such as economic conditions, political changes are disregarded in the
In this research the association between directors’
remuneration and firm performance is assessed depending on the 15 companies
listed in the Colombo Stock Exchange out of 295 listed companies for the years
2012 – 2016.
From the list of market capitalization in Colombo
Stock Exchange, first 15 companies are selected excluding companies involved in
banking and finance industry as they are regulated by Central Bank and other
relevant statutory Boards. Moreover by selecting first 15 companies in the
order of market capitalization, it is expected to reduce the effect of firm
Secondary data are collected from the CDs and web
site of CSE for the research. List prepared in order to the market
capitalization is obtained from the database in Colombo Stock Exchange and
first 15 companies select excluding finance and insurance industry companies. Then
using the annual reports of the selected listed non-financial companies,
relevant data are collected to carry out the research. Directors’ compensation
is disclosed under the notes to the financial statements as it is one of the
statutory requirements to be followed.
In this research multiple linear regression analysis
is expected to be used to investigate about the relationship and the extent of
impact caused by directors’ remuneration on firm performance. Besides that
Descriptive Analysis is expected to use in analyzing the data spread and
correlation analysis as a diagnosis test to diagnose the relationship between
independent and control variables.