Purpose This study aims to investigate the relationship between management characteristics including management capability, management entrenchment, agency costs and overconfidence and firm performance in companies listed on the Tehran Stock Exchange market. Design/methodology/approach The research population includes 125 companies after applying systematic elimination sampling method during 2010-2016. The primary measure for companies’ performance is return on assets and Demerjian et al. (2012a) model is used to measure managerial characteristics. Findings The results indicated that two management characteristics, namely, management capability and overconfidence are positively associated with firm performance and improve the level of performance. Agency costs did not have any significant effect on firm performance and management entrenchment leads to deterioration in firm performance. Originality/value The paper focuses on managerial characteristics and firm performance, which the results may very helpful to companies and investors to hiring managers with specific characteristics. Moreover, the results may give strength to further studies.

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