Resumo

Compensation through executive incentives would be a corporate governance practice able of facing agency problems (Conyon et al. 2019). The owners offer the most diverse types of contracts for different managers, according to the agents' skills, knowledge and behavior (Macho-Stadler & Pérez-Castrillo, 1997). The foreign experience would reduce the uncertainties regarding the qualifications of the executives, indicating a probable accumulation of personal and professional cultural knowledge (Conyon et al. 2019).

In the corporate finance literature, studies focusing on the relationship between executive compensation and foreign experience are scarce and there is no empirical evidence to explore foreign experience as a possible determinant of executive compensation. In this context, the problem question in this study is: What is the influence of foreign experience on the executive compensation policy? To answer this question, the purpose of this study is to identify the influence of foreign experience on the executive compensation policy for publicly traded companies in Brazil.

Although there is a considerable number of theoretical and empirical studies and research, focusing on executive compensation, its results are not conclusive (Conyon et al. 2019). In terms of human capital, the foreign experience would have an important impact on the cognitive orientation of executives and would influence their skills and perceptions for decision-making (Conyon et al., 2019). However this “favorable” view in terms of corporate and personal advantages derived from the managers' foreign experience is also questioned (Conyon et al., 2019).

The study sample comprises publicly traded companies listed on B3. The period of analysis is from 2010 to 2018, due to the disclosure of the information regarding the members of the board through the reference forms of the CVM (Brazilian Securities and Exchange Commission). The dependent variables correspond to executive remuneration, and the independent variables correspond to executive foreign experience. The variables were submitted to the statistical program STATA14® and the regression model in panel data estimated by the GMM-Sys method, were applied.

The main empirical evidence suggests that Brazilian companies tended to value, with higher salaries, the experience of working abroad and the foreign nationality of their executives. However, an international academic experience and the increase of foreign owners, causes executives to receive lower salaries. Large companies are willing to offer them higher salaries, while financially leveraged companies tend to pay CEOs lower salaries. Companies with growth opportunities had better remunerate their CEO's, which is not observed in relation to the accounting performance of companies.

The results suggested that having foreign academic experience it would not be a motivator to increase executive compensation. This situation approaches the findings of Machado and Sonza (2018), who argue that the foreign academic experience in Brazil would be an institutional isomorphism. However, the foreign professional experience would increase the remuneration of the executives. It is consistent with the argument that the foreign experience would promote an accumulation of human and social capital, increasing the amount of remuneration paid to executives (Conyon et al. 2019).

Conyon, M. J., Haß, L. H., Vergauwe, S., & Zhang, Z. (2019). Foreign experience and CEO compensation. Journal of Corporate Finance, 57, 102–121. Machado, V. N., & Sonza, I. B. (2018). Vale a pena investir em experiência estrangeira do Brasil? Encontro nacional de pós-graduação em administração-Enampad 2018-ANPAD-Assiciação Nacional de Pós-Graduação em Administração. Curitiba - Brasil. Macho-Stadler, I., & Pérez-Castrillo, D. (1997). An introduction to the economics of information: Incentives and Contracts (Oxford, Ox). Oxford, Oxford University Press.