Executive compensation package revealed in a modern skyscraper.

Executive Pay Unveiled: Are Brazilian Companies Transparent Enough?

Mira Elwood in Business & Economy July 2025 • 4 min read.

"Dive into the evolving world of executive compensation in Brazil and discover how disclosure regulations are shaping corporate transparency."

In today's business environment, executive compensation is more than just a number—it's a reflection of a company's values, governance, and commitment to stakeholders. The trend toward variable compensation, which ties executive pay to performance, has made transparency in this area increasingly vital. This article delves into how Brazilian companies listed on the BM&FBovespa (Brazil's stock exchange) are disclosing their executive compensation practices, with a particular focus on variable pay.

Executive compensation has become a hot topic in both corporate and academic circles in recent years. Studies suggest that variable pay policies should align with long-term organizational goals, not just short-term gains for executives. Regulatory bodies and market participants alike are pushing for greater transparency in how companies disclose their executive pay policies.

This article aims to unpack the evolution of executive compensation disclosure among Brazil's largest publicly traded companies. By examining trends before and after the implementation of stricter regulatory guidelines, we’ll explore whether these measures have truly led to greater transparency and accountability.

Decoding Executive Pay Disclosures: A Timeline of Transparency

Executive compensation package revealed in a modern skyscraper.

A study was conducted to understand how the transparency of variable executive compensation evolved in the financial statements of major Brazilian publicly traded companies between 2008 and 2012. The research used a qualitative approach, analyzing administration reports, explanatory notes, annual information, and reference forms to identify key trends in disclosure practices.

The analysis focused on five key categories, derived from the Brazilian Institute of Corporate Governance (IBGC) and section 13 of Annex 24 of CVM Instruction n° 480/09. These categories provided a structured framework for assessing the depth and breadth of compensation disclosures.

Pre-2009: Superficial Disclosures: Before stricter regulations took hold, companies typically disclosed only the total amount of variable compensation, lacking detailed breakdowns.
2009-2012: Increased Transparency: With the mandatory adoption of reference forms, there was a notable increase in the level of information disclosed. Companies began providing more insights into their variable compensation plans, particularly within the reference forms.

While there was an overall improvement in disclosure practices, some areas still lagged behind. For instance, companies often stopped short of revealing individual executive compensation figures, opting instead for aggregated data at the administrative body level.

The Path Forward: Enhancing Accountability in Executive Compensation

The research underscores the importance of regulatory frameworks in driving corporate transparency. While Brazil has made significant strides in improving executive compensation disclosure, there is still room for enhancement. The ongoing push for greater transparency reflects a broader global trend toward holding executives accountable for their performance and aligning their interests with those of shareholders.

Moving forward, companies should strive to provide more granular details about their compensation plans, including individual executive pay, performance metrics, and the rationale behind compensation decisions. Such disclosures not only satisfy regulatory requirements but also foster trust and confidence among investors and other stakeholders.

By embracing transparency and accountability in executive compensation, Brazilian companies can strengthen their corporate governance practices and contribute to a more sustainable and equitable business environment. The journey toward full disclosure may be ongoing, but the benefits for all stakeholders are undeniable.

About this Article -

This article was crafted using a human-AI hybrid and collaborative approach. AI assisted our team with initial drafting, research insights, identifying key questions, and image generation. Our human editors guided topic selection, defined the angle, structured the content, ensured factual accuracy and relevance, refined the tone, and conducted thorough editing to deliver helpful, high-quality information.See our About page for more information.

This article is based on research published under:

DOI-LINK: 10.4025/enfoque.v34i3.26154, Alternate LINK

Title: Evidenciação Da Remuneração Variável Dos Executivos Nas Maiores Empresas Brasileiras Listadas Na Bm&Amp;Fbovespa

Subject: Psychiatry and Mental health

Journal: Enfoque: Reflexão Contábil

Publisher: Universidade Estadual de Maringa

Authors: Ilse Maria Beuren, Júlio Orestes Da Silva

Published: 2015-09-01

Everything You Need To Know

How transparent was variable executive compensation disclosure from Brazilian companies before 2009?

Before 2009, disclosures regarding variable executive compensation by Brazilian companies were generally superficial. Companies typically disclosed only the total amount of variable compensation without providing detailed breakdowns or insights into how these figures were derived. This lack of specific information made it difficult for stakeholders to assess the alignment of executive pay with performance and company strategy.

What impact did mandatory reference forms have on variable executive compensation disclosures between 2009 and 2012?

The implementation of mandatory reference forms, driven by regulatory guidelines such as CVM Instruction n° 480/09, significantly increased the level of detail disclosed by Brazilian companies regarding variable executive compensation between 2009 and 2012. These forms required companies to provide more in-depth information about their variable compensation plans, offering stakeholders greater transparency into the structure and criteria for executive pay.

What limitations still exist in the disclosure of variable executive compensation, even after increased transparency efforts?

While transparency in variable executive compensation disclosure has improved in Brazil, companies often stopped short of revealing individual executive compensation figures. Instead, they tended to disclose aggregated data at the administrative body level. This approach limits the ability of stakeholders to assess the compensation of individual executives and understand how their pay aligns with their specific performance and contributions to the company.

What methods were used to evaluate the changes in transparency of variable executive compensation, and what sources of information were analyzed?

The study utilized a qualitative approach, primarily analyzing administration reports, explanatory notes, annual information, and reference forms of major Brazilian publicly traded companies. The research examined the trends in disclosure practices related to variable executive compensation between 2008 and 2012. The analysis was guided by five key categories derived from the Brazilian Institute of Corporate Governance (IBGC) and section 13 of Annex 24 of CVM Instruction n° 480/09 to provide a structured framework for assessing the depth and breadth of compensation disclosures.

What are the broader implications of the research findings for corporate governance and executive accountability in Brazil?

The study highlights the significance of regulatory frameworks, like CVM Instruction n° 480/09, in enhancing corporate transparency regarding executive pay. While Brazil has made notable progress, continuous efforts are needed to push for more granular disclosures, including individual executive compensation figures, and to ensure accountability in executive compensation practices. Greater transparency aligns executive interests with those of shareholders and promotes better corporate governance.