The study of the effect of motivation on the senior managers of wealth creation for Shareholders

Subject Areas : Journal of Investment Knowledge

Zohreh Hajiha ¹ (Assistant Professor, Department of Accounting, Islamic Azad University, East Tehran Branch, Iran)
Hassan Chenari Bouket ² (Master of science in Accounting, Islamic Azad University of South (Corresponding Author))

Received: 2012-09-10 Accepted : 2013-01-09 Published : 2013-01-09

Keywords: CEO pay efficiency, shareholder value added, shareholders wealth,

Abstract :

Shareholders are the original owner of the business unit and continuously seek to maximize their own wealth and the wealth of the business unit for optimal performance will result. Due to high sensitivity of investors to the performance of companies wealth is one of the most important objectives of the companies and the performance appraisal systems are useful tools for appraisal evaluation of the manager's performance. So, the main aim of this paper is the study of the relationship between Pay-for-performance sensitivity as an independent variable and shareholder value added & CEO pay efficiency ‌as a dependent variables in Tehran Stock Exchange. Therefore, the data of 81 firms for a five-year period (1385-1389) were studied. The multivariate pooled regression model is used to test the hypotheses. The results show that there is significant relationship between Pay-for-performance sensitivity and shareholder value added but there is no significant relationship between Pay-for-performance sensitivity and CEO pay efficiency. Although the overall result is executive senior managers for Iranian companies to create value for shareholders, but payment is not efficient enough.