Background and Objectives: Corporate governance is one of the key elements in improving the economic efficiency of companies, and above all, it aims to support shareholders' interests against the managers of the companies and prevent the unintended transfer of wealth between different groups and the misappropriation of public rights and shareholders. The board of directors plays an important role in overseeing the work of managers and safeguarding the interests of shareholders. Due to potential agency problems, corporate boards may not utilize company resources to increase shareholder wealth. Modern thinkers consider improving corporate governance as the best solution to this problem. Corporate governance consists of criteria that can both reduce concentration of control in companies, thereby reducing excessive managerial rewards, and improve and enhance company performance. Therefore, this research examines the relationship between managerial rewards and company performance and analyzes the impact of corporate governance on this relationship in family firms.

Methodology: For this purpose, 205 years of corporate data (41 accepted family firms listed on the Tehran Stock Exchange during the years 2010 to 2014) were selected, and the influence of corporate governance on the relationship between managerial rewards and company performance was tested using regression analysis. The Corporate Governance Index developed by Dr. Mehrani and Safarzadeh was used to measure the degree of corporate governance, while the financial statements of the companies were utilized to calculate managerial rewards. Company performance was evaluated using the return on assets and return on equity indicators.

Results: The findings indicate a positive and significant relationship between company performance and managerial rewards, which is moderated by corporate governance.

Conclusion: The results suggest that in the Tehran Stock Exchange market, the performance of companies is crucial in determining board of directors' compensation. This emphasizes the need for managers to focus on the interests of shareholders.