The objective of this study was to examine the existence of an endogenous relationship between executive compensation approximated by the total and variable remuneration and the value of the firm. Empirically, we used a sample of 467 French listed firms during the 2004-2007 periods. We used a simultaneous-equation model where we included the governance variables and ownership structure as determinants of the relationship. The endogenous relationship was only detected between the variable remuneration and the value of the firm. It was a two-way relationship accounted for by opportunism. Any increase in compensation was negatively perceived by investors, and any increase in the value urges the shareholders to reduce the variable part of the remuneration. Key Words: Executive Compensation, Firm Value, Endogeneity, Simultaneous-Equation Model, France.