M.A. Thesis:

Firm performance٫ managerial ownership and executive remunerating

An economic unit consists of two groups of managers and shareholders. According to agency theory, each of these two groups is pursuing their own interests. One of the scenarios that may help reduce the gap between the two groups is the existence of property management. Thus, it is as one of the mechanisms designed to align the interests of executives with shareholders. In fact, high compensation of managers will better motivate them and increase shareholder wealth. It is expected that enterprise performance and management ownership affect executives’ compensation and this study seeks to explore the relation between company performance and management ownership with executives’ compensation. In this study, executives’ compensation is calculated based on the natural logarithm of the compensation of board of directors. To measure the performance of the companies, Tobin's Q ratio, and for management ownership, percentage of ownership of board was used. In order to test the hypotheses, multivariable regression models is used and panel data is used to estimate regression models. The study period covers the years 2010 to 2014. The sample consisted of 80 companies. By controlling company size, financial leverage, the size of the Board, and based on the results and statistical tests at the error level of 5 percent, it could be argued that there is no significant direct relationship between company performance and executive compensation. There is no significant relationship between management ownership and executive compensation. Moreover, there is a direct significant relationship between company performance and management ownership with executives’ compensation.

Keywords: Keywords: corporate performance, management ownership, executive compensation, company size, financi