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Eletrobras (ELET3): Will the 130% increase in management remuneration impact dividends?

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Readjustment in Eletrobras management compensation should not impact dividends, say experts (Image: Fernando Frazão/Agência Brasil)

The 130% readjustment in the remuneration of the management of the Eletrobras 🇧🇷ELET3) should not impact the dividends to be distributed by the company in the coming quarters, says Felipe Leão, a specialist at Value Investments🇧🇷

According to him, the calculation, made by the consultancy korn ferryalready designs the company’s business plans and, therefore, “would not be reckless with the distribution of dividends”.

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The company itself states that the study is in line with the strategic guidelines, contemplated in its 2022-2026 business and management master plan.

Eletrobras announced on Tuesday (22) that it would pay R$ 35.9 million to administrators, members of the fiscal council and statutory committees. For members of the executive board, the amount is R$30.5 million. The proposal will be voted on in December.

cash increase

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Valor’s specialist explains that the indicative for the readjustment considers the eventual reduction of expenses with payroll of the Eletrobras — who would have recently gone through a voluntary resignation program —, and the hindrances of privatization🇧🇷

Leão says that, with the privatization, the company becomes more competitive and starts to face the market with greater margin. With this, investors should expect increased cash flow and profit generation.

The analyst of Activate Investments, Ilan Arbetman, points out that it is important to know how to differentiate the price of having a strong board and board of directors, from the value that this company can generate for shareholders. “We face this increase naturally”, he says.

With that, the company’s cash must support the readjustment and dividends.

Experts also say that the readjustment is necessary to keep top talent within the company, especially in the face of an extremely competitive market. Eletrobras explained that, during the last seven years, there were no readjustments in remuneration.

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Source: Moneytimes

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