Do Boards Of Directors Affect CEO Behavior? Evidence From Payout Decisions
Artem Anilov () and
Irina Ivashkovskaya ()
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Artem Anilov: National Research University Higher School of Economics
Irina Ivashkovskaya: National Research University Higher School of Economics
No WP BRP 69/FE/2018, HSE Working papers from National Research University Higher School of Economics
We test the ability of boards of directors to eliminate the negative impact of CEO behavior on payout policy. We contribute to the literature by testing the ability of boards to influence CEO payout propensity. First, we show that if the compensation scheme of a CEO does not stimulate him or her to take more risk, the level of payout will be higher. Second, by introducing an index of corporate governance quality we show that corporate governance tools may reduce the negative effects of CEO risk preferences: in companies with good corporate governance, the risk preferences of the CEO do not affect payout decisions. Third, based on a set of specifications for risk preferences, we show how the impact of CEO attitudes to risk influences the types of payouts
Keywords: behavioral finance; corporate governance; payout policy. (search for similar items in EconPapers)
JEL-codes: G34 G35 G41 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cfn
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Published in WP BRP Series: Financial Economics / FE, November 2018, pages - 30
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Persistent link: https://EconPapers.repec.org/RePEc:hig:wpaper:69/fe/2018
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