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

Authors

  • Rodrigo Rengel Universidade Federal de Santa Catarina (UFSC)
  • Allison Manoel de Sousa Universidade Federal do Paraná (UFPR) https://orcid.org/0000-0002-5959-6078
  • Januário José Monteiro Universidade Federal de Santa Catarina (UFSC)
  • Rodrigo Malta Meurer Universidade Federal de Mato Grosso do Sul (UFMS).

DOI:

https://doi.org/10.5585/riae.v19i1.16787

Keywords:

Business risk, Remuneration of executives, Variation of remuneration.

Abstract

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.

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Author Biographies

Rodrigo Rengel, Universidade Federal de Santa Catarina (UFSC)

Doutorando em Contabilidade pela Universidade Federal de Santa Catarina (UFSC), Mestre em Contabilidade pela Universidade Federal de Santa Catarina (UFSC) e Bacharel em Ciências Contábeis pela Universidade do Estado de Santa Catarina (UDESC).

Allison Manoel de Sousa, Universidade Federal do Paraná (UFPR)

Doutorando em Contabilidade pela Universidade Federal do Paraná (UFPR), Mestre em Contabilidade pela Universidade Federal de Santa Catarina (UFSC) e Bacharel em Ciências Contábeis pela Universidade Federal da Grande Dourados (UFGD).

Januário José Monteiro, Universidade Federal de Santa Catarina (UFSC)

Doutorando em Contabilidade pela Universidade Federal do Paraná (UFPR), Mestre em Contabilidade pela Universidade Federal de Santa Catarina (UFSC) e Bacharel em Ciências Contábeis pela Universidade do Extremo Sul Catarinense (UNESC).

Rodrigo Malta Meurer, Universidade Federal de Mato Grosso do Sul (UFMS).

Mestre em Contabilidade pela Universidade Federal de Mato Grosso do Sul (UFMS) e Bacharel em Ciências Contábeis pela Universidade Federal da Grande Dourados (UFGD).

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Published

22.05.2020

How to Cite

Rengel, R., Sousa, A. M. de, Monteiro, J. J., & Meurer, R. M. (2020). Analysis of the relationship between risks and executive compensation in companies listed in B3. Revista Ibero-Americana De Estratégia, 19(1), 149–169. https://doi.org/10.5585/riae.v19i1.16787

Issue

Vol. 19 No. 1 (2020): Jan./Mar.

Section

Articles

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