The Effect of Managers' Compensation on the Taking Risk of Companies Listed in Tehran Stock Exchange

Document Type : Research Paper

Authors

1 Assistant Professor, Department of Accounting & Management, Shahriyar Branch, Islamic Azad University, Shahriyar, Iran

2 Financial Markets Research Group, Research Institute of Economics, Tehran, Iran

Abstract

The present study was conducted to investigate the effect of managers’ compensation on taking risk behavior of company in stock market. To achieve this purpose, the variable of taking risk behavior has been measured through fluctuations in stock returns. The research method is also descriptive-applied. The statistical population of this research includes companies listed on the Tehran Stock Exchange. For this purpose, financial information of 110 companies during the period of 2011 to 2017 has been prepared by the method of combined data analysis, and has been analyzed using econometrics software (Eviews8). In general, results of the present study showed that in the period after the imposition of US sanctions against the Islamic Republic of Iran, managers' compensation has a significant direct relationship with company taking risk behavior. In the other part, the results showed that there is an inverse significant relationship between size of company and taking risk behavior of companies, whereas there is a direct significant relationship between the share of major shareholders of the company and taking risk of companies.

Keywords

References

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History

  • Receive Date: 06 May 2020
  • Revise Date: 24 November 2020
  • Accept Date: 01 March 2021

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