Capital structure, Employees' wage and Compensation of the Board of Directors in Iran

The main purpose of this study is to investigate the relationship between capital structure and Employees' wage costs and compensation of the board of directors in Iran. The paper sample consists of 968 observation and 121 firms listed on the Tehran Stock Exchange during 2011-2018. The statistical model used in this study is a multivariate regression model; further, the statistical technique used to test the hypotheses is panel data. The results indicate there is a significant and positive relationship between the financial leverage (calculated to the market value and book value) and the compensation of the board of directors in current and previous year. On the other hand, there is no relationship between the financial leverage and the cost wages. The results also showed that there is a significant negative relationship between employee wages and board compensation. What really sets this paper apart from other studies is that this research will make aware investors and stakeholders of this fact that in some countries like Iran that facing with inflation and we should consider this factor in our analysis. In this research capital structure calculated according book value and market value. In addition, it is the first research that calculated relationship between capital structure, employees' wage and compensation of the board of directors. Undeniably, the study results will complete the knowledge gap between the developed economies and the emerging markets