MECHANISMS OF COMPENSATION AND PERFORMANCE OF COMPANIES. AN EMPIRICAL ANALYSIS OF COMPANIES LISTED IN B3.

Abstract

The theory of conflict between company agents, in which owners hire and delegate decision making to executives, causes a shock of interest due to a divergence of interests. The purpose of this paper was to understand the influence of management compensation on the performance of publicly traded companies listed on B3. For this, multiple regressions with panel data were used. The survey sample has active Brazilian companies that traded shares in B3 between 2010 and 2017. The compensation mechanisms were represented by the Average Salary; the proportion of variable salary and share-based compensation. To measure company performance financial indicators (ROA, ROE and LPA) were used. Results show that there is a relationship between the mechanisms used to remunerate managers and performance indicators. Also, both types of incentives positively affect performance, confirming the theory of interest alignment between agent and principal.