Journal of Corporate Finance Vol. 35 2015

CEO risk preferences and dividend policy decisions

Deren Caliskan¹; John A. Doukas^2,3,1

¹ Old Dominion University · ² University of Cambridge · ³ Dominion University College

Abstract

This study examines whether risk aversion-inducing CEO compensation motivates managers to pay more dividends regardless of investor preferences. Using inside debt (i.e., pensions and deferred compensation) and the sensitivity of CEO equity compensation to stock price changes (i.e., high CEO delta), as proxies of CEO risk aversion, we document that inside debt induces CEOs to pay dividends while convex CEO compensation decreases dividend payout.

DOI

10.1016/j.jcorpfin.2015.08.007

Volume

35

Pages

18-42

Language

en

Sources

bibtex:phds-export.bib openalex crossref

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