- Analysis of factors that influence executive pay in Brazil
The FGV EBAPE study covers corporate governance issues, i.e. how shareholders define their objectives and ensure that they are pursued by hired executives. Executive remuneration, the definition of appropriate values, the value of the fixed portion, the variable portion, the percentage in shares and other benefits - which involve sometimes complex engineering - becomes essential to the objectives set by the shareholders or owners. And incentives work in the various hiring processes, not just for companies.
The highest pay in 2016 in the US was almost $ 100 million, but only 2 million were fixed salary, all the rest in stocks and options. In addition, the average executive pay in the top 500 companies was more than 300 times that of an average worker. This study shows that, in Brazil, the highest remuneration reached R $ 27 million, but with an average close to R $ 2 million, about 40 times that of employees.
This research also evaluates how the compensation structures of executives are elaborated and the positive or negative results they bring. That is, whether the compensation structure creates appropriate incentives. The intention is to be able to contribute to promote better corporate governance practices in companies, but also to understand the importance of incentives, how they are structured, how they work and how they can be used in many other contexts.