Dividend Policy and Executive Compensation in Brazilian Banks

Objective: verify the relationship between dividend policy and share -based remuneration in the Brazilian banking context. Method: models were estimated via System GMM in a sample of banking institutions with shares traded on B3 - Brazil, Stock Exchange, and Over -the -Counter, considering the period from 2010 to 2021. Originality/Relevance: banks carry out activities that drive and contribute to the development of a country, and, at the same time, mistaken decisions taken by management are subject to social and economic risks with the potential to affect the entire economy. Despite this, studies on the relationship between dividends and executive remuneration in banking institutions are still incipient. Results: the main findings suggest a bidirectional behaviour: Executive Remuneration was positively related to Payout and, in parallel, presented a negative association with Dividend Yield. The result for Dividend Yield aligns with previous research in different institutional environments but is divergent concerning Payout. Theoretical/Methodological contributions: analyzing dividends and remuneration is relevant as it contributes to the debate on how these variables can influence governance and how this relationship occurs in the Brazilian context. Social/Management contributions: the study of the dividend policy of banking institutions contributes to society as banks participate in both the capital market and the country's economy.