CEO dividend protection
Journal of Empirical Finance, 2018, vol. 45, issue C, 194-211
This paper studies CEO dividend protection, an important element in the executive compensation package that protect CEOs’ compensation from stock price drops due to dividend payments. First, I show that there is large variation among S&P 500 firms in whether they provide dividend protections to their CEOs or not. Second, CEO dividend protection is positively associated with firms’ dividend payout. Third, a time series analysis suggests that dividend protection is implemented prior to a firm increasing dividends. Finally, there is no evidence suggesting that CEO dividend protection affects other corporate policies, such as cash holdings and investment.
Keywords: Payout policy; Executive compensation; CEO dividend protection (search for similar items in EconPapers)
JEL-codes: G30 M52 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:empfin:v:45:y:2018:i:c:p:194-211
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Journal of Empirical Finance is currently edited by R. T. Baillie, F. C. Palm, Th. J. Vermaelen and C. C. P. Wolff
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