An analysis of corporate board compensations in the Portuguese energy sector

Abstract

If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service information about how to choose which publication to write for and submission guidelines are available for all. Please visit www.emeraldinsight.com/authors for more information. About Emerald www.emeraldinsight.comEmerald is a global publisher linking research and practice to the benefit of society. The company manages a portfolio of more than 290 journals and over 2,350 books and book series volumes, as well as providing an extensive range of online products and additional customer resources and services.Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committee on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive preservation. AbstractPurpose -The aim of this paper is to investigate how the corporate board compensations as a whole, must be perceived as fair and not directly related to the short-term results, thus avoiding embarrassment and misunderstanding. Design/methodology/approach -The study analyzed the theoretical issues associated with the question of corporate board compensation and developed a research applied to two companies in the Portuguese energy sector, listed on stock exchanges. Findings -The findings reveal that total remuneration paid to board of directors is in line with the values involved in the business, which is not always well perceived by Society. Practical implications -The Portuguese energy sector is based on a concentrated market structure. The boards of the companies seem to be composed of independent directors, their pay systems consisting of a fixed and a variable component; this seems supported by a capitalist logic of value creation for shareholders. Originality/value -This is the first time that corporate board compensations have been publicly revealed. The analysis of systems of remuneration of directors is made using the public information provided by the respective companies in the year 2009. The total remuneration is compared with the size of their respective companies.

Directors characteristics and stock market performance in Canada

“…In recent years, the remuneration received by the directors has begun to have an increasing attention (Andreas et al, 2012). In fact, the compensation must be perceived as fair and not be directly linked to short-term results thereby avoiding embarrassment and misunderstanding (Rodrigues and Seabra, 2012). A new trend in this area deals with the remuneration of directors and its effect on corporate behavior, such as decisions on diversification or research and development strategy (Jensen and Zajac, 2004).…”

“…Indeed, the trend of director compensation policy is based on the company's performance (Jensen and Murphy, 2004) and the disclosure of the specific remuneration of each director (European Commission, 2004). The need for transparency, including publication of director's remuneration is to publicly acknowledge the link between compensation and the overall performance of the company (Rodrigues and Seabra, 2012). A positive performance on executive compensation gives them the legitimacy to have the ability to create value for shareholders.…”

“…According to these authors the right director compensation enhances business performance. Rodrigues and Seabra (2012) emphasize the link between the remuneration of directors and the overall performance of the company. Moreover, Jensen and Murphy (2004) argue that the compensation is based on the past performance of the company.…”

Remuneração dos executivos e indicadores de desempenho em empresas participantes do Ibovespa

“…Entretanto, ainda é incipiente a oferta de estudos que apresentam um panorama investigativo para o perfil desses executivos, apesar de sua importância estratégica como responsáveis pelo alcance das metas da empresa. Além disso, vale destacar a relevância da discussão sobre o tema remuneração dos administradores, considerado uma questão sensível no processo de convergência entre os objetivos da gestão e os dos proprietários, com a finalidade principal de maximizar o desempenho e o valor da empresa (Brealey, Myers, & Allen, 2011;Rodrigues & Seabra, 2011 A Teoria da Agência reflete-se, portanto, no conflito de interesses existente entre esses atores (Jensen & Meckling, 1976;Klein, 1984) e pode ser definida como a relação entre duas pessoas, em que uma delas (principal) delega à outra (agente) tarefas para serem desempenhadas em favor da primeira.…”