Under U.S. Securities and Exchange Commission regulations, companies must show compensation paid to CEOs, chief financial officers and other senior executives in a “clear, concise and understandable” way, including the amount, type and criteria used in determining pay.
The Brazilian rule change was prompted by long-running fights in the U.S. over executive pay in the midst of the 2008 financial crisis, said Castro Neves. In Brazil, “we didn’t have such big distortions.”
“You can’t import everything -- you have to look at our realities,” Castro Neves said in a telephone interview.
Embraer declined to comment about its pay policies, as did Vale, the world’s biggest iron-ore producer, and Itau, Latin America’s largest bank by market value.
CVM Victory
When asked about the dispute, the CVM cited its arguments in a case it won against linens maker Teka-Tecelagem Kuehnrich SA in which the regulator said divulging salaries is aligned with international regulations and provides transparency and credibility. Teka didn’t return an e-mail request for comment.
While kidnappings still rank as a concern for affluent Brazilians, incidents have plunged in recent years. In Sao Paulo state, Brazil’s richest with a third of gross domestic product, nine people were abducted in 2013’s fourth quarter, according to the state’s security department. That compares with 127 people in the same period of 2001.
“If you’re the head of a company that makes 2 billion reais a year, it doesn’t matter if you make 1 million, 2 or 3 million,” said Renato Chaves, a partner at Mesa Corporate Governance, a Sao Paulo-based consultant. “You’ll be a target because of what you represent, not because of what you make.”
ISS worked on pay disclosure with real estate company PDG Realty SA, whose market value of 2 billion reais is less than a fifth of its 2010 level. PDG shared details that year, then reversed course in 2011 after seeing its CEO on the cover of local magazines, making him a kidnapping target, Guerra said.
PDG’s Experience