The influence of shareholders remuneration composition on information content of net income of Brazilian public companies

Name: SILVIO FREITAS DA SILVA

Publication date: 04/09/2015
Advisor:

Name	Role
ALFREDO SARLO NETO	Advisor *

Examining board:

Name	Role
ALFREDO SARLO NETO	Advisor *
CLÁUDIO MÁRCIO PEREIRA DA CUNHA	Internal Examiner *

Summary: This study aims to analyze the influence of the shareholders compensation composition on the
informational capacity of accounting profits in the shares of companies listed on the BM &
FBOVESPA. The sample was composed of 172 stocks of companies traded on the São Paulo
Stock Exchange ranging the years of 2010 to 2014, with a total of 595 observations per
variable. The data used in this research were obtained from information collected in a
software database named Comdinheiro and the web site of BM & FBovespa. Regarding the
main information, dividends and interest on equity, they were collected, promptly, in
standardized financial statements available at the Brazilian SEC web site (CVM). It was
found during the study that the total shareholders compensation, dividends and future
compensation contribute positively to the informational capacity of accounting earnings for
explaining the return of the shares of companies listed on the BM & FBovespa. In addition, it
was found that at the time of release of the Cash Flow Statement, interest on equity and past
salaries do not contribute to informational capacity of accounting profits, as they were already
reflected in stock prices. Net income was positive and statistically significant in all models, as
the main variable that impacts on stock returns, this result is consistent with the findings of
Ball and Brown (1968), Beaver (1968) and Sarlo Neto (2009). It is suggested for further
research on the relationship of the compositions of shareholders compensation and stock
prices, the analysis considering factors such as specific regulatory sectors, ownership structure
and type of controller.

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