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  • Open Daily: 10am - 10pm
    Alley-side Pickup: 10am - 7pm

    3038 Hennepin Ave Minneapolis, MN
    612-822-4611

Open Daily: 10am - 10pm | Alley-side Pickup: 10am - 7pm
3038 Hennepin Ave Minneapolis, MN
612-822-4611
Finance and Economics Discussion Series: Corporate Payout Policy and Managerial Stock Incentives

Finance and Economics Discussion Series: Corporate Payout Policy and Managerial Stock Incentives

Fenn, George W.
Liang, Nellie
United States Federal Reserve Board

Paperback

General Political Science

Publisher Price: $15.75

ISBN10: 128871808X
ISBN13: 9781288718085
Publisher: Bibliogov
Published: Feb 6 2013
Pages: 34
Weight: 0.18
Height: 0.07 Width: 7.44 Depth: 9.69
Language: English
We examine how corporate payout policy is affected by managerial stock incentives using data on more than 1100 nonfinancial firms during 1993-97. We find that management share ownership encourages higher payouts by firms with potentially the greatest agency problems--those with low market-to-book ratios and low management stock ownership. We also find that management stock options change the composition of payouts. We find a strong negative relationship between dividends and management stock options, as predicted by Lambert, Lannen, and Larcker (1989), and a positive relatinship between repurchases and management stock options. Our results suggest that the growth in stock options may help to explain the rise in repurchases at the expense of dividends.

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