Analysis of the relationship between risks and executive compensation in companies listed in B3

Rodrigo Rengel, Allison Manoel de Sousa, Januário José Monteiro, Rodrigo Malta Meurer


Objective: To analyze the relationship between executive compensation and the risk of companies from different sectors of B3.

Methodology: The relationship between executive compensation and the risk of 61 companies in the Abattoir sectors analyzed; Banks; Construction of residential buildings; Generation, transmission and distribution of electricity; Rental of Real Estate, and; Telecommunications, between 2011 and 2017 through descriptive statistics and through the multivariate panel model.

Relevance: The influence of executive compensation on companies' risk discussed, in which the results are divergent and performed in emerging and developed countries that do not present macroeconomic characteristics, such as high rates of inflation and interest rates in the case of Brazil. In this way, this study presents evidence in this different perspective.

Main Results: The findings show that executive compensation is negatively associated with corporate risk. However, the change in executive compensation influences the companies' risk. Additionally, it found that the size of the organizations is positively associated with the companies' risk, unlike the profitability of the asset, which negatively related to the risk of the companies.

Theoretical contributions: The present study presents contributions regarding the incentive implications of risk compensation in companies from different sectors of the Brazilian capital market, especially considering that managers can, from their decisions, select projects that influence the risk of the company's operations.


Business risk; Remuneration of executives; Variation of remuneration.


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