Analyzing the Relationship between Institutional Ownership and Corporate Performance Considering the Moderating role of Board of Directors' Compensation

Document Type : Original Article

Author
Kourosh Nematnezhad
M,A, Department of Development and Economic Planning, Firozkoh branch, Islamic Azad University, Firozkoh, Iran.
10.22034/jmek.2023.392991.1079
Abstract
Institutional owners buy and sell a large amount of company shares in most of the different institutions. Institutional shareholders include banks, insurance companies, social security organizations, pension funds and investment companies. For this reason, institutional investors became the largest group of shareholders in various companies, which directly and indirectly affect the performance of managers and companies. Managers want their company to reach an acceptable level of growth and security; Because they are more concerned about their survival than maximizing the value of the company for its shareholders. But the shareholders leave the decision-making authority to the managers, expecting that the managers will try to maximize their interests. The purpose of this study is to analyze the relationship between institutional ownership and the performance of companies, taking into account the moderating role of the board of directors' remuneration. After collecting the information related to the variables of this study and performing the required tests, the research models were estimated to test the hypothesis and the results show that with the increase in the percentage of institutional ownership, the performance of the companies improved and the bonus of the board of directors also had a positive effect on this relationship.

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Management, Economics and Entrepreneurship Studies
Volume 3, Issue 4
Winter 2023
Pages 46-55

  • Receive Date 13 April 2022
  • Revise Date 27 April 2022
  • Accept Date 28 July 2022