Determinants of voluntary executive stock option disclosure in Brazil

Abstract

This study investigates whether the governance attributes of Brazilian companies are associated with voluntary executive stock option (ESO) disclosure. Results show that Brazilian companies voluntarily disclose very little about their ESO plans, and that board size, presence of a compensation committee, and auditing by a Big 4 firm are significantly related to the degree of voluntary ESO disclosure. We also show that family-controlled companies in Brazil are associated with low voluntary ESO disclosure. Results are robust to a number of specification tests, dependent and explanatory variable measurements, and sample composition. This study has professional and regulatory implications for Brazil and other emerging capital markets. The results underscore the need for stricter rules for executive compensation reporting in Brazil, and they invite policy makers and regulators in emerging markets to consider the effects of company-level governance factors on disclosure incentives.

Non‐compliance in Executive Compensation Disclosure: the Brazilian Experience

“…These injunction firms, which represent approximately 30% of total market value traded on the Bovespa, represents our group of interest. Recent research finds that Brazilian firms remain relatively opaque thanks to the protection of the court injunction (Schiehll et al., ). Appendix B provides a list of the companies taking advantage of the injunction.…”

Voluntary Corporate Governance Disclosure Innovative Evidence: The Case of Jordan

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Corporate Governance Rating and Ownership Structure in the Case of Turkey

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