Remuneração variável de executivos e manipulação de resultados

Abstract

The agency theory explains that conflicts of interest occur between managers and shareholders. The variable compensation is a mechanism that can mitigate these problems and align interests, however it can encourage executive directors to manipulate results to achieve defined objectives, although efficient corporate governance mechanisms may suffice to nullify the incentives to earnings management arising from the attribution of variable compensation. The present dissertation aims to study the impact of the variable compensation of executive directors on earnings management in the portuguese context. To reach this goal, the cross-sectional Modified Jones Model was used to quantify the earnings management through discretionary accruals, and a multiple linear regression model was used to assess whether there is a statistically significant correlation between the short-term variable compensation and earnings management, as well as between the medium/long-term variable compensation and earnings management. The data used was collected from the companies’ financial reports, as well as corporate governance reports and the Refinitiv Eikon database. The sample consists of 38 companies listed on Euronext Lisbon, between 2015 and 2021, inclusive. The results indicate that there is no statistically significant correlation between short-term variable compensation and earnings management, the same being observed with medium/long-term variable compensation. These results suggest that companies can use variable compensation to align interests between managers and shareholders, without the disadvantage of encouraging greater earnings management through accruals.

Date of Award	3 Jul 2023
Original language	Portuguese
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Maria José Martins Lourenço da Fonseca (Supervisor) & Ricardo Ribeiro (Co-Supervisor)