scholarly journals Executive Compensation and Performance of Companies in the Brazilian Capital Market: Evidence of Negative Relationship with Focus on the Interests of the Controlling Shareholder

2021 ◽  
Vol 18 (1) ◽  
pp. 23-55
Author(s):  
Isaac Gezer Silva de Oliveira ◽  
Annor da Silva Junior
Keyword(s):  
Executive Compensation ◽  
Capital Market ◽  
Negative Relationship ◽  
Public Companies ◽  
Controlling Shareholder ◽  
Family Control ◽  
Governance Model ◽  
The Board Of Directors ◽  
And Performance ◽  
The Relationship

This study aims to analyze the relationship between executive compensation and performance in public companies listed on the Brazilian capital market – [B]3 Brasil Bolsa Balcão. Theoretically, the study is based on the agency theory focusing on the principal-principal perspective of agency conflict. The sample comprised the 100 companies with the highest liquidity in the trading of shares listed on the [B]3 during the 2010-2015 period, totaling 488 observations. Six hypotheses were developed, and several variables were measured to test the relationship between executive compensation and performance. For the selected sample, the results of the estimated econometric models indicate that executive compensation has a negative relationship with variables performance, presence of family on the board of directors, voting rights shares, and the duality of two share classes, voting and non-voting. The results also indicate a negative relationship between ownership concentration and performance and a nonsignificant relationship between executive compensation and family control. The synthesis of the results indicates that the corporate governance model adopted by Brazilian public companies prioritizes the interests of the controlling shareholder instead of executive compensation.

scholarly journals Composition of the board of directors and pay-performance sensitivity

2019 ◽  
Vol 30 (79) ◽  
pp. 28-41 ◽  
Author(s):  
Isac de Freitas Brandão ◽  
Alessandra Carvalho de Vasconcelos ◽  
Márcia Martins Mendes De Luca ◽  
Vicente Lima Crisóstomo
Keyword(s):  
Corporate Governance ◽  
Executive Compensation ◽  
Board Of Directors ◽  
Capital Market ◽  
Agency Conflicts ◽  
Governance Mechanism ◽  
Executive Board ◽  
Controlling Shareholder ◽  
Performance Sensitivity ◽  
The Board Of Directors

ABSTRACT This article investigates, in the Brazilian capital market, the effect of the composition of the board of directors on executive compensation sensitivity to market performance, known as pay-performance sensitivity (PPS). Due to potential agency conflicts between controlling and minority shareholders and between shareholders and managers, members of the board of directors of the executive board or those appointed by the controlling shareholder might have less independence, something which may compromise monitoring effectiveness and, consequently, reduce the PPS. The purpose is contributing to understand the agency conflicts that have taken place in the Brazilian capital market and to define the configuration of the monitoring and compensation mechanisms that minimize total agency costs, maximizing shareholders’ wealth. The research results have implications for understanding the agency relations and for corporate governance in the Brazilian capital market. It is concluded that the relation between the monitoring exercised by the board of directors and executive compensation is a condition for its effectiveness as a governance mechanism in the Brazilian capital market. Data within the period 2013-2015 from 92 companies that participate in the Brazil 100 Index (IBRX 100) of the São Paulo Stock, Mercantile & Futures Exchange (BM&FBOVESPA) were analyzed. In addition to tests of difference between mean values and correlation, estimates were processed through feasible generalized least squares modeling. The independence of the board of directors vis-à-vis the controlling shareholder and the executive board may work as a corporate governance mechanism supplementing executive compensation. The results of this study indicate that the proportion of executives and independent members in the board of directors reduces the PPS, a measurement for executive compensation effectiveness made operational by the contemporary relation between increased managers’ compensation and increased company’s market value.

scholarly journals Corporate reputation

2018 ◽  
Vol 25 (1) ◽  
pp. 47-64 ◽  
Author(s):  
Vanessa Pires ◽  
Guilherme Trez
Keyword(s):  
Organizational Performance ◽  
Corporate Reputation ◽  
Research Field ◽  
Social Implication ◽  
Public Companies ◽  
Content Type ◽  
Theoretical Paper ◽  
The Difference ◽  
And Performance ◽  
The Relationship

Purpose The purpose of this paper is to discuss the different approaches to the corporate reputation construct, in order to identify a comprehensive definition that can be used for measurement purposes, gaps identified by previous literature identified. Design/methodology/approach This is a theoretical essay. The authors analyzed studies that involve the relationship between corporate reputation and organizational performance, and the attributes of national and international corporate reputation ratings. Findings The authors identified a more comprehensive definition for the reputation construct, and indicated courses for the construct’s measurement, by considering: the judgment by the stakeholders (internal, suppliers, clients and the financial market); periodical evaluations under different organizational perspectives; attention to theoretical assumptions, among other aspects. Research limitations/implications The study is a theoretical paper that presents that the research field has many definitions that cannot be used interchangeably. It indicated how the reputation construct should be operationalized for measurement purposes. This study presented a reflection on the relationship between corporate reputation and performance, showing that it is not a settled topic in the academy. Practical implications The study advances the understanding of the reputation construct measurement, considering the adopted definition and the discussion of the attributes of the main ratings on corporate reputation. The adoption of a measurement method that takes into account the definition used in this study and the features of the methodologies discussed will improve the corporate reputation assessment. Social implications Literature indicates that a good corporate reputation can affect organizational performance and the inverse relationship is also true. As a social implication, it is extremely relevant to improve the understanding the definition and measurement methods of this construct. Originality/value This study discusses one of the most important intangible resources for organizations, contributing to the understanding of the difference between the market value and the book value of public companies. Besides it should be considered that there is one lack of a definition directly related to the measurement of the reputation construct in the literature, a gap in which this study contributes.

scholarly journals Green CSR Moderated by Public Visibility and Innovation Performance at Indonesia Companies

2020 ◽  
Vol 24 (1) ◽  
pp. 1
Author(s):  
Rahmat Hidayat, Farah Margaretha Leon
Keyword(s):  
Positive Relationship ◽  
Negative Relationship ◽  
Innovation Performance ◽  
Manufacturing Companies ◽  
Innovation Activities ◽  
And Performance ◽  
Relationship Of ◽  
The Relationship

This study aims to analyze the green CSR  of innovation performance  with firms approval variables  and public visibility   can support moderating the relationship of green CSR  and innovation. The research sample was 33 manufacturing companies. The results showed that the  green CSR has a positive and significant effect on innovation . Also, the company approval variable has been proven to moderate the direction of a positive relationship between green CSR and innovation . The results also prove that public visibility is proven to moderate the direction of the negative relationship between green CSR and performance. This study provide information that shows great concern for the environment; it will increase the company in making changes through innovation activities. Also, the higher the company's approval and public visibility, the company will get support from various stakeholders to run the firms. The level of company concern for CSR activities will be a misjudgment for investors.

scholarly journals The relationship between inter-organizational trust and performance

2012 ◽  
Vol 60 (4) ◽  
pp. 89-98 ◽  
Author(s):  
Roman Fiala ◽  
Martin Prokop ◽  
Iva Živělová
Keyword(s):  
Structural Equation ◽  
Organizational Trust ◽  
Negative Relationship ◽  
Fit Indices ◽  
Supplier Performance ◽  
Significant Negative Relationship ◽  
Model Fit Indices ◽  
And Performance ◽  
Using Data ◽  
The Relationship

The article deals with an investigation of the relationship between inter-organizational trust and performance. Using data obtained in a questionnaire survey in 373 organizations with more than 20 employees with their seat in the Czech Republic, we found the relationship between inter-organizational trust and supplier performance, mediated by the level of conflict. Also, the statistically significant negative relationship between inter-organizational trust and costs of negotiation and the statistically significant positive relationship between supplier performance and perceived performance were confirmed. The hypothesis on the statistically significant relationship between inter-organizational trust and negotiating costs was not confirmed. The structural equation modelling technique was used in the calculations. The calculated model fit indices (CFI, NFI, NNFI) with values over 0.9 demonstrate a very good quality of the model.

Culture and Law in Corporate Governance

2015 ◽  
Author(s):  
Amir N. Licht
Keyword(s):  
Corporate Governance ◽  
Executive Compensation ◽  
Cultural Analysis ◽  
Corporate Law ◽  
Cultural Dimensions ◽  
Dividend Distribution ◽  
The Board Of Directors ◽  
Research Findings ◽  
Corporate Social ◽  
The Relationship

This chapter explores the relationship between culture and law, especially corporate law, and its implications for corporate governance. It begins with an overview of the basic concepts in cultural analysis as well as prevalent theories of cultural dimensions and of social networks as social capital. It then summarizes research findings regarding the consequences of culture for corporate governance on issues ranging from executive compensation to legal transplants and the objectives of the corporation (corporate social responsibility). It also discusses relations with investors and other stakeholders by way of disclosure and dividend distribution, along with the operation, composition, and network structure of the board of directors. Finally, the chapter considers how the relationship between culture and law affects diversity and persistence in corporate governance.

scholarly journals Performance of Islamic banks

2019 ◽  
Vol 11 (2) ◽  
pp. 303-321 ◽  
Author(s):  
Abdalmuttaleb Musleh Alsartawi
Keyword(s):  
Negative Relationship ◽  
Multiple Linear Regression Model ◽  
Annual Reports ◽  
Islamic Banks ◽  
Return On Assets ◽  
Content Type ◽  
Gcc Countries ◽  
Governance Model ◽  
Supervisory Boards ◽  
The Relationship

Purpose This paper aims to investigate the relationship between the composition of Sharīʿah supervisory boards (independence and frequency of meetings) and the performance of Islamic banks in the Gulf Cooperation Council (GCC) countries. Design/methodology/approach The study developed a multiple linear regression model, and data were collected from the annual reports of 48 standalone Islamic banks listed in the GCC countries covering the period between 2013 and 2017. Findings The results showed a statistically significant and negative relationship between the composition of the Sharīʿah supervisory boards and the performance of Islamic banks. Research limitations/implications As the current study used only one indicator, that is Return on Assets to measure performance, it is recommended to expand the framework of this study, through the addition of market-based performance indicators such as Tobin’s Q. Practical implications This study recommends the GCC countries to follow a more proactive Sharīʿah governance model to strengthen their frameworks from both regulatory and non-regulatory aspects. Originality/value The study contributes to the Sharīʿah governance and Islamic banking literature relating to the GCC countries as previous studies gave no attention to the composition of Sharīʿah supervisory boards.

Examining the age‐performance relationship for entrepreneurs: Does the innovativeness of a venture make a difference?

2015 ◽  
Vol 18 (1) ◽  
pp. 41-57 ◽  
Author(s):  
Kanti V. Prasad ◽  
Kyle Ehrhardt ◽  
Yiyuan Liu ◽  
Kamlesh Tiwari
Keyword(s):  
Representative Sample ◽  
Negative Relationship ◽  
Performance Outcomes ◽  
Nascent Entrepreneurs ◽  
Venture Performance ◽  
Contingency Perspective ◽  
Mixed Support ◽  
And Performance ◽  
The Relationship ◽  
Moderating Role

Whether older or younger entrepreneurs may be better positioned to achieve performance outcomes for their ventures is a much debated question. Here, we draw on Galenson℉s theory of creativity to propose a contingency perspective for understanding the relationship between entrepreneur age and venture performance, suggesting that a venture℉s level of innovativeness plays a moderating role. Results from a representative sample of 1,182 nascent entrepreneurs revealed mixed support for our hypotheses. While a negative relationship was found between entrepreneur age and performance for those developing “innovative” ventures, no relationship was found between entrepreneur age and performance for those developing “imitative” ventures.

scholarly journals The Relationship Between Integrative Self-Knowledge, Mindfulness, Self-Control, and Mental Health Parameters

2021 ◽  
Vol 9 (SPE3) ◽  
Author(s):  
Fatemeh Hajifathali ◽  
Nima Ghorbani ◽  
Reza Rostami
Keyword(s):  
Mental Health ◽  
Negative Relationship ◽  
Depression Scale ◽  
Self Esteem ◽  
Self Control ◽  
Self Knowledge ◽  
And Performance ◽  
Knowledge Scale ◽  
The Relationship ◽  
Authentic Pride

Background: Self-regulating is a set of processes that controls or alters individuals’ behavior, emotion, and performance. We aimed to evaluate the relation between three components of self-regulating including integrative self-knowledge, mindfulness, self-control, and some variables of mental health and self-conscious emotions. Methods: A total of 233 Iranian university students voluntarily enrolled in the study. Seven questionnaire forms including Integrative Self-Knowledge Scale (ISKS), Attention Awareness Scale (MASS), Short Self Control Scale (SSCS), Costello & Comrey's Anxiety and Depression Scale, Rosenberg Self–Esteem Scale (RSES), Authentic Pride Scale (APS), and other as sham scale (OAS) were distributed to participants. The correlation between self-regulating variables, mental health, and self-conscious emotions were analyzed using Pearson's correlation coefficient test. Results: We found a negative correlation between self-regulating variables, depression, and anxiety. Our data also revealed that self-esteem positively related to integrative self-knowledge, mindfulness, and self-control. Among self-conscious emotions variables, authentic pride had a positive correlation with self-regulating variables whereas feelings of shame appeared a negative relationship with them. Conclusion: Integrative self-knowledge, mindfulness, and self-control as self-regulating components correlated to mental health and self-conscious emotions.

scholarly journals Dividend policy and ownership structure: A study of Russian dual-class stock companies.

2017 ◽  
Vol 15 (1) ◽  
pp. 199-212 ◽  
Author(s):  
Irina Berezinets ◽  
Yulia Ilina ◽  
Liudmila Alekseeva
Keyword(s):  
Ownership Structure ◽  
Dividend Policy ◽  
Negative Relationship ◽  
Trading System ◽  
Public Companies ◽  
Dividend Payout ◽  
Dividend Payments ◽  
Dual Class Shares ◽  
Dual Class ◽  
The Relationship

This paper explores the relationship between ownership structure and dividend policy in Russian public companies with dual-class shares. The sample includes all companies issuing both ordinary (voting) and preferred (non-voting) shares traded on the Russian Trading System (RTS) in the period of 2003-2009. Using panel data and employing both linear and nonlinear regression modeling approach, we tested the relationship between ownership structure and dividend payout. One of the major conclusions is the existence of a negative relationship between the dividend payout on ordinary shares and institutional ownership, as well as between dividend payout on ordinary shares and offshore ownership. Unlike for ordinary shares, ownership structure is not related to dividend payments on preferred shares. Dividend policy on preferred shares is, instead, essentially related to a company’s performance.

An agency perspective on the board of directors and corporate entrepreneurship

2017 ◽  
Vol 40 (11) ◽  
pp. 1201-1215
Author(s):  
Mark A. Tribbitt ◽  
Yi Yang
Keyword(s):  
Board Of Directors ◽  
Negative Relationship ◽  
Corporate Entrepreneurship ◽  
Publicly Traded ◽  
Content Type ◽  
The Board Of Directors ◽  
Publicly Traded Firms ◽  
Using Data ◽  
The Relationship

Purpose The purpose of this study is to examine the relationship between board dependence, antitakeover provisions and their influence on corporate entrepreneurship (CE). Design/methodology/approach The study uses agency theory as a framework to expand on the board dependence–CE relationship by injecting the moderating role of antitakeover provisions to the model. Using data collected from 350 publicly traded firms, a panel regression analyses was conducted on both innovation and venturing components of CE. Findings The findings of this study show a negative relationship between board dependence and CE. Further this study shows that such a negative relationship becomes weaker when higher levels of antitakeover provisions are injected into the model. Research limitations/implications This study was conducted using a sample of large publicly traded firms within the information and manufacturing sectors, and so our findings may not be generalizable to firms in other contexts. Further, other variables representing CE (e.g. new product introductions) may add to this line of research in the future. Practical implications Understanding the role of board of directors within a firm may help foster CE throughout the organization. Originality/value This study expands on existing research by incorporating the influence of environmental factors (e.g. antitakeover provisions) and examining the relationship between corporate governance and CE using both measures of innovation and venturing.

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