The impact of compensation and benefits on Financial Performance: a Case study on Arab Potash Company

Abstract

This study aims to examine the impact of compensation and benefits on financial performance applied on the Arab Potash Company, and it's one of the few studies according to the researcher's best knowledge which is examine the impact of compensations and benefits of the members of the executive management and the board of directors on the net operating income before tax as a measurement of financial performance. Based on the published secondary data from the annual reports of the Arab Potash Company at the period of 2007- 2018 the company performance was inferred. The research hypotheses were examined by the statistical analysis software E-views 0.9, and it presents the following results. There is a significant impact of representation fees for board of director’s members on the financial performance however the rest of the compensations and benefits elements for the members of the board of directors and executive management have no significant impact on the financial performance The study recommended that the organization must Work to link the increase in compensation and benefits for the members of the management rate of increase in production and sale, and directors' remuneration should be linked to net annual profit or loss, rather than being paid in fixed cash, regardless of the profit or loss the company will achieve. Also, the researcher recommends his fellow researchers in the field of business administration and finance, to try the same research on other industrial companies, and using the same independent variables or other variables.