Name: INGRID RAMOS LIMA SORENSEN
Publication date: 26/04/2019
Advisor:
Name |
Role |
|---|---|
| PATRÍCIA MARIA BORTOLON | Advisor * |
Examining board:
| Name |
Role |
|---|---|
| PATRÍCIA MARIA BORTOLON | Advisor * |
| RODRIGO SIMONASSI SCALZER | Internal Examiner * |
Summary: After the 2008 crisis and the various financial scandals involving large multinationals, the debate about executive compensation intensified and regulatory changes were observed in the direction of greater disclosure by companies. Remuneration is considered as an important governance tool given its potential for aligning interests between shareholders and managers. In Brazil, shareholders can evaluate executive compensation since 1976, but only with CVM Instruction 480 // 2009, which instituted the Reference Form, its disclosure has become more transparent and accessible. In 2015, distance voting and disclosure of the voting maps of the Shareholders' General Meetings were instituted. This regulatory environment favored shareholder activism related to executive compensation. The present study aims to study the determinants of rejection rates for executive remuneration proposals voted at General Shareholders' Meetings. The minutes of the Assemblies of 179 companies were observed between the years 2015 to 2018, and collected results of the votes of the proposals of executive remuneration during those years. The results of the votes were confronted with data on performance, ownership structure, characteristics of the Board of Directors and listing in different segments of governance. The results suggest that the relative characteristics of the remuneration, such as excessive remuneration, performance payment sensitivity, proportion of the remuneration on Ebitda, difference in relation to the average remuneration of the sector, influence more the rejection of the proposals than the performance variables characteristic of corporate governance. This result is different from those observed in international studies related to Say on Pay, WHERE performance appears as the most influential factor in the determinants of rejection of proposals for executive remuneration in international companies. In the Brazilian case, remuneration and corporate governance suggest influencing the shareholders' decision to reject the compensation proposals in the investees.
