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Paper Information

Journal:   JOURNAL OF EMPIRICAL RESEARCH IN ACCOUNTING   WINTER 2019 , Volume 8 , Number 2 (30) ; Page(s) 127 To 153.

A Board of Directors Compensation Model for Iranian Firms

* Tehran University
The purpose of this study is to provide a conceptual model for determining the board of directors' compensation of Iranian firms using experts' opinion. The multidimensional nature of management compensation has led to the presentation of various economic and social theories about it. A compensation model should be planned in accordance with the cultural, legal, economic and social characteristics of the country. This research is qualitative and its data has been collected by interview method and analyzed by theme analysis. Results of the research are presented in the form of a conceptual model including factors affecting the board of directors' compensation, relations among the mentioned factors, the application scope, presumptions, constraints and environmental factors. The results of the research show that in order to determine the board of directors' compensation, the extent and conditions of achieving annual goals of the firms and moderating factors should be considered. The annual goals achievement of a firm is influenced by the annual goals of the firm after adjusting for unexpected changes in macroeconomic, industry and firm conditions; the importance of each of the objectives; and the annual performance of the firm after adjusting for major shareholder decisions and fraudulent reporting and illegal actions. The conditions for reaching the annual goals of a firm include a firm size, the industry competition intensity, work difficulties in the industry, liquidity of the firm, changes in firm risk and the probability that the board will be deprived of social rights. Moderating factors include legal constraints, rewards of similar firms, and salaries and benefits paid to the board members.
Keyword(s): Performance measurement,board compensation,theme analysis
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