Do Managerial Motives Impact Dividend Decisions in REITs?
Chinmoy Ghosh and
The Journal of Real Estate Finance and Economics, 2006, vol. 32, issue 3, 327-355
Conflict of interest between shareholders (principal) and managers (agent) is a potential weakness of the modern corporate form. Various monitoring mechanisms—pay for performance compensation schemes, mix of cash compensation and long term compensation, the independence of the board of directors, the market for takeovers, and capital structure—have been developed to discipline management and motivate them to maximize shareholder wealth. We test the hypothesis that dividend payout levels reflect the quality of and motivation for managerial decision making and are a function of performance and monitoring effectiveness. Consistent with this hypothesis, our analyses indicate that dividend payout, and dividend yield are functions of corporate performance, board structure, CEO tenure, and CEO ownership of company shares. Copyright Springer Science + Business Media, Inc. 2006
Keywords: Dividend policy; Performance; Corporate governance; Managerial entrenchment (search for similar items in EconPapers)
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