Managerial compensation, ownership structure and profitability in Norwegian hydroelectric energy companies : N/A
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Today, the Norwegian energy sector is significantly dominated by public ownership, both directly and indirectly, and the sector has turned out to be very profitable compared to other sectors. This master thesis starts by introducing some concepts of corporate governance and the agency theory which will be the theoretical basis. The study attempts to determine the relationship between the level of fixed pay and profitability, and ownership structure and profitability of Norwegian hydroelectric energy companies. According to a tremendous amount of research conducted on these relationships in other industries and sectors, the level of compensation to the CEO, the number of owners and the size of the largest shareholder are explanatory factors to the profitability of each company. In this study, I will examine whether we can make the same generalization about the Norwegian energy industry, with regards to the extensive governmental and municipal ownership influence and the historical perspective regarding the monopolistic pre-1991 market conditions of these companies in Norway. The empirical data collection was based on all of the companies with total revenues exceeding NOK 100 millions, hence no regional or structural limitations. I have used regression analyses in order to carry out the research. Despite the vast amount of research on this field which indicates relations, I was not able to determine any relationship between the level of fixed pay or the number of owners and profitability in my population. However, I was able to indicate a weak positive relationship between owner concentration and profitability of the industry.
Masteroppgave i økonomi og administrasjon - Universitetet i Agder 2009