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Compensation alignment is one the measures used to minimize agency problem by converging the capital users and capital owners’ interest. Despite this measure, Capital users’ incentives have become excessively high at the detriment of capital owners due to managerial entrenchment and opportunistic behaviour. Against the backdrop, the study examines the moderating influence of CEO’s power on the responsiveness of corporate performance to corporate compensation of listed companies in Nigeria. The study design was based on the existing data of 109 listed companies available from 2008 to 2022. The research deployed multivariate regression analyses. The result revealed two logical outcomes, first, that revenue per employee and profit per employee were insensitive to corporate compensation per employee but they are statistically significant whereas Tobin’s Q as independent variable was sensitive but it is statistically insignificant. Secondly, the pairwise regression on the moderating influence of CEO’s power on the compensation performance sensitivity (CPS) result shows that CEO tenure and ownership have a moderating effect on CPS.. Largely this evidence sheds crucial insight into empirical and theoretical ability of the study to use compensation performance sensitivity to explain the theory of optimal contracting theory (OCT) and managerial power theory (MPT) and predict it through the robustness of econometric models used. Keywords: Corporate compensation, corporate performance, corporate governance, sensitivity, CEO power, multivariate regression. JEL Classification: G32, G34, G38

Keywords: Corporate compensation, corporate performance, corporate governance,

Citation: , & Adeusi, S.A. (2023). Corporate Performance Sensitivity and Corporate Compensation: Moderating Effect of CEO’s Power in Listed Companies in Nigeria. International Journal of Innovative Research in Accounting and Sustainability, 8(3), 1-21.