Impacto do disclosure da remuneração dos executivos no desempenho, política de compensação, risco e liquidez: análise em países com fraca proteção legal

Abstract

The separation between ownership and control made the occurrence of conflicts of interest between the parties interested in the firms inevitable, which, combined with an environment of informational asymmetries, led to agency problems. Corporate Governance emerges to mitigate these conflicts and, for this, proposes practices such as executive compensation policies and information disclosure. In recent years, the growing demand for information on executive compensation has led several countries to adopt stricter requirements regarding the disclosure of compensation packages. Specific characteristics of regions and nations, such as legal origin, shape different systems of Corporate Governance, influencing the temporal aspect the adoption regulation of remuneration disclosure. Given the above, the objective of this study is to identify the effect of mandatory disclosure of executive compensation on performance, compensation policy, risk, and liquidity of firms in countries with weak legal protection. Therefore, a quasi-experiment was carried out using the Difference-in-Differences (DID) method, in which the mandatory disclosure of executive compensation is assumed as an exogenous shock. Thus, the effect of the legal framework was compared on firms that were affected and on those that were not, before and after legal intervention, in countries of legal origin in French civil laws (Argentina, Belgium, Brazil, Spain and Italy). Furthermore, for a joint analysis considering the influence of specificities and latent variables of the countries, multilevel generalized linear models were estimated. The main results indicate that the compulsory disclosure of executive compensation decreases the accounting performance of Brazilian firms, however, it increases the market performance of Argentine and Brazilian companies. Legal intervention reduces executive salaries but increases compensation for shares and options in Spanish companies, on the other hand, Brazilian managers receive higher total compensation. Regulating the disclosure of incentives to executives also reduces the market risk of firms in Brazil, Spain, and Italy, as well as the liquidity of Belgian and Brazilian companies. In the joint analysis between the countries, the results of the multilevel models suggest that the regulation of remuneration disclosure would be a good mechanism to combat agency problems, given that it increases accounting performance and decrease the proportion of resources held in cash by firms in countries with weak legal protection.