GENDER DIVERSITY AND EXECUTIVE COMPENSATION POLICY: INSIGHTS FROM MALAYSIAN FIRMS
DOI:
https://doi.org/10.46754/Keywords:
MCCG 2021, Refinitiv Eikon, ESG, SDG 5, executiveAbstract
This study explores the determinants of gender equality in executive compensation policies among Malaysian Publicly Listed Companies (PLCs), in alignment with Sustainable Development Goal 5 (SDG 5). Despite regulatory efforts such as the Malaysian Code on Corporate Governance 2021 (MCCG 2021), gender disparities persist in senior leadership and compensation structures. Against this background, this research investigates how organisational and governance factors relate to the presence of gender-inclusive compensation policies. Thus, this study adopts a quantitative research design utilising secondary data collected from 26 PLCs across 12 sectors between 2022 and 2024. The data were obtained from annual reports and the Refinitiv Eikon database, supplemented with background information on 100 board directors. Findings reveal that fewer than half of companies have formal performance-based compensation policies incorporating diversity considerations. Furthermore, on average, women receive 93.2% of male compensation, with disparities reaching as low as 30% in some firms. In addition, companies with moderately sized boards and stronger Environmental, Social and Governance (ESG) performance are more likely to adopt inclusive pay policies. For future direction, the study highlights the continued underrepresentation of women in executive roles and the influence of board demographics on governance outcomes. Accordingly, policy implications include mandatory gender pay disclosures, stronger diversity targets and integrating gender metrics into ESG frameworks to foster inclusive and equitable corporate environments in Malaysia.
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