Title: Does the remuneration of the managers constitute a creation factor of the shareholders' richness?

Authors: Hentati Fakher; Bouri Abdelfettah

Addresses: Faculty of Economic Sciences and Management, University of Sfax, BP 1088, Tunisia ' Faculty of Economic Sciences and Management, University of Sfax, BP 1088, Tunisia

Abstract: The remuneration of the managers constitutes a current debate which relates to the governorship of firm and which fits in a prospect for alignment of the interests of the managers and shareholders. It was the subject of vast running of research mainly Anglo-Saxon and French-speaking. Many Anglo-Saxon publications tend to show the positive effect of a practice of shareholding of the managers on the richness of the shareholders. However, the French practices are radically different from the Anglo-Saxon practices. In Tunisia, few studies were carried out on this subject. It seems, thus, important to study in this paper the effects of the remuneration of the managers on the shareholders' richness of the Tunisian firms. From the econometric tests applied to Tunisian data of panel, the principal results show that remuneration by the formula of the shareholding does not necessarily constitute an effective means to force the managers to meet the interests of the shareholders. This corroborates the assumptions of the entrenchment theory.

Keywords: managerial remuneration; shareholder wealth; entrenchment theory; dividend policy; corporate governance; Tunisia; econometrics.

DOI: 10.1504/IJMFA.2015.071183

International Journal of Managerial and Financial Accounting, 2015 Vol.7 No.2, pp.103 - 113

Received: 31 Aug 2014
Accepted: 21 Jan 2015
Published online: 16 Aug 2015 *

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