Performance measures that support executive compensation shown in the reference forms of companies listed on B3

Abstract

This study aimed to identify the performance measures that companies use to establish executive compensation. To achieve this, it employed a qualitative method involving content analysis of 7,752 Reference Forms from companies listed on the B3 that disclosed these forms between January 2010 and September 2021. The procedure to achieve the proposed objective utilized Robotic Process Automation (RPA) and the Python programming language, integrating the PyAutoGUI library and Natural Language Processing (NLP). The main results indicated a greater concern among companies with cash generation, a characteristic feature of increasingly competitive scenarios; an increased focus on items related to customer satisfaction; and in issues related to the Environmental, Social, and Governance (ESG) indicator, the word "social" appeared with the highest frequency. Regarding Return on Equity (ROE), a decrease was observed over the analyzed period, followed by a resurgence in mentions. ROE assists in aligning the interests of managers and shareholders, suggesting that companies are replacing salaries (which are risk-free and offer little incentive) with bonuses (which are riskier but provide greater incentives). Concerning more qualitative metrics, there was an increase in the number of expressions related to customer satisfaction. The results contribute to advancing discussions on executive compensation and performance measures by demonstrating how these aspects have been addressed by companies and evidenced in the Reference Forms.