Compensation system for executives and members of the board of directors as a support to the corporate governance structure

Abstract

This paper examines the alignment between the compensation system of executives and members of the board of directors and the corporate governance structure. The corporate governance structure is made up of the board’s chairman, its members, the CEO and the executive directors. The authors did a large review of the literature and found out that it shows an isolated system of corporate governance and compensation, rather than a joint and integrated one. To conduct the research they used the exploratory method and the technique of interviews in the companies that had adhered to the differentiated levels of corporate governance of the São Paulo Stock Exchange. For the treatment of the data they used the technique of content analysis. Their main conclusion is that there was an alignment between the structure of corporate governance and the compensation system. They found out that there was a continuous follow-up of the operational and financial results and a concern to show the investors that the companies have reliable controls and the compensation is one of the periodically audited elements.

Key words: compensation, corporate governance, executives.