Investigate the Relationship between Company Performance, Executive Compensation and Corporate Leverage of Companies Listed in Tehran Stock Exchange

The aim of this study was to investigate the relationship between company performance, executive compensation and corporate leverage of companies listed on the Tehran Stock Exchange. The research methodology was conducted within the framework of Inductive-deductive reasoning, it means, theoretical fundamentals research history is by library studies, articles and Web sites in the form of inductive and collect information to confirm or reject the hypothesis in deductive form. The study population consisted of all companies listed on the Stock Exchange of Tehran. According to the official website of the Tehran Stock Exchange by the end of year ۲۰۱۳, all companies listed include ۵۲۰ companies in ۳۷ industry groups, respectively. The results of the first hypothesis showed that there is significant inverse relationship between Company performance and volatility of financial leverage. A negative coefficient for this variable (-۰.۲۴۸۶) implies that there is an inverse relationship between firm performance and volatility of financial leverage. Based on the results of the second hypothesis, there are a significant and direct relationship between fluctuations executive compensation and corporate financial leverage. The positive coefficient for this variable (۰.۰۰۱۰) ​​suggests the existence of a direct link between executive compensation and corporate financial leverage volatility. The third hypothesis test results showed that there is a significant inverse relationship between the positive performance of executive compensation and corporate financial leverage fluctuations,. A negative coefficient for this variable (-۰.۰۰۱۰) indicate an inverse relationship between positive performance due to executive compensation and corporate financial leverage volatility.

Keywords:

Company performance , Executive compensation , Corporate leverage , Stock Exchange