REFLECTIONS OF CORPORATE GOVERNANCE ON PAY-PERFORMANCE SENSITIVITY: A NEW PERSPECTIVE

• Autor(a) principal: IGLESIAS,THAYLA M. G.
• Data de Publicação: 2022
• Outros Autores: SILVA,TAÍS D., JESUKA,DUTERVAL, PEIXOTO,FERNANDA M.
• Tipo de documento: Artigo
• Idioma: eng
• Título da fonte: RAM. Revista de Administração Mackenzie
• Texto Completo: http://old.scielo.br/scielo.php?script=sci_arttext&pid=S1678-69712022000100401
• topic: Executive compensation; Board composition; Ownership structure and control; Corporate governance; Pay-performance sensitivity

ABSTRACT Purpose: This research investigates whether the characteristics of corporate governance (executive compensation, board composition, ownership structure, and control) influence the sensitivity of remuneration to firms’ performance, the so-called pay-performance sensitivity. Originality/value: This study brings to the literature a new perspective on the interaction of corporate governance mechanisms aligned with the concept of pay-performance sensitivity. The study shows that governance instruments are not isolated but rather interrelated and interdependent. Design/methodology/approach: The study sample was composed of Brazil 100 Index (IBRX 100) companies listed on B3 from 2014 to 2018. Data were extracted from the Economatica® database, and the reference forms were accessed on the Securities and Exchange Commission of Brazil’s (CVM) website. We use panel data regression models with fixed and random-effects models. Findings: The board composition (represented by the CEO/Chairman duality) increases the pay-performance sensitivity, while the ownership concentration reduces it. In addition, a greater presence of independent members on the board reduces the variation in executive compensation.