Apakah Kompensasi Eksekutif Bank dapat Mempengaruhi Manajemen Laba ?

Abstract

The purpose of this study is to see how the role of compensation given to executives in earnings management in Indonesian banking. Specifically, this study empirically examines executive compensation against the level of bank discretionary accruals. This study uses panel data from bank companies whose shares are listed on the Indonesia Stock Exchange for 5 years (2015-2019) involving 30 banks consisting of 150 observations. Data were analyzed using panel data regression with a random effect model. The results showed that compensation has a positive effect on discretionary accruals. This finding underline that the provision of compensation has not succeeded in aligning conflicts of interest as agency cost in Indonesian banking. As a practical contribution, this research can be used as a basis for banking decision making regarding the treatment of compensation for CEOs or directors, especially for banks.