The Effect of the Executive Compensation on the Capital Structure and Financial Performance of Companies Listed in Tehran Stock Exchange

The main objective of this study was to investigate the effect of executive compensation on the capital structure and financial performance of the companies listed in Tehran Stock Exchange for the period 2005 to 2012 and the information of 58 companies was used. The research hypotheses were tested using panel data regression model and ordinary least squares. Based on the results, factors such as firm size and the ratio of market value to book value changes of cash equity had significant negative effects on the capital structure of the company. There is, however, a significant positive relationship between the rewards of the board and financial performance and parameters such as the size of the company.