 Does the use of stock incentives influence the payout policy of financial institutions?Aigbe Akhigbe and Ann Marie Whyte The Quarterly Review of Economics and Finance, 2012, vol. 52, issue 1, 63-71 Abstract: We investigate the link between payouts and stock incentives among financial institutions. We hypothesize that the varying degree of regulation across depositories, insurers, and securities firms is likely to influence the observed relation to the extent that regulation substitutes for other monitoring mechanisms. We find that managerial stock ownership is inversely related to dividend payouts across the institutions, consistent with the notion that managerial stock ownership is an effective method of reducing agency problems. We do not find evidence that the relationship occurs because of regulation since all institutions, regardless of the degree of regulation, exhibit the same inverse relationship between dividend payouts and management stock ownership. Our results suggest that, among financial institutions, regulation complements managerial stock ownership in minimizing agency problems. Keywords: Repurchases; Dividends; Payouts; Compensation; Stock options; Management shares (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:quaeco:v:52:y:2012:i:1:p:63-71 DOI: 10.1016/j.qref.2011.12.003 Access Statistics for this article The Quarterly Review of Economics and Finance is currently edited by R. J. Arnould and J. E. Finnerty More articles in The Quarterly Review of Economics and Finance from Elsevier |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.