Shareholder concentration, board structure and executive remuneration

Abstract

Understanding the dynamics of agency conflicts in Brazilian firms requires investigating the influence of shareholder concentration and board structure in the remuneration level of executives. Based on a sample of 232 firms traded on B3 between 2014 and 2016, we found shareholder concentration to have a negative effect on executive remuneration, as predicted by the Agency Theory. The characteristics of the board structure also have repercussions on executive compensation. Some of these characteristics affect the sensitivity of compensation to shareholder concentration, which, contrary to the Managerial Power Approach., highlights the predominance of the principal–principal conflict in Brazil.

Keywords

• shareholder concentration
• board of directors
• executive compensation
• agency conflicts
• managerial power