Paper Title

Do Disciplinary Forces on CEO Increase Corporate Cash Pay-out?

Location

University of Washington Tacoma, Philip Hall

Event Website

http://www.tacoma.uw.edu/clsr/academic-conference

Start Date

12-7-2013 9:00 AM

End Date

12-7-2013 10:30 AM

Description

I argue that older CEOs perceive greater job-related pressure and that pro rata cash dividends treat shareholders more equally than discriminatory share repurchases. As a result, older CEOs pay out more cash via dividends and less cash via share repurchases to cater to shareholder needs. My results are consistent with CEOs under heavier pressure providing more cash dividends and less share repurchases. These results hold after controlling for firm age, size, leverage, growth, cash flow, profitability, and past payout history. The results are also robust to measuring job-related pressure as predicted CEO turnover probability. My results suggest that cash payout types and CEO age offer readily observable information on the outcome of corporate governance.

JEL classification: J63; G35

Comments

Presenter elected not to include the text of the paper in these electronic proceedings.

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Jul 12th, 9:00 AM Jul 12th, 10:30 AM

Do Disciplinary Forces on CEO Increase Corporate Cash Pay-out?

University of Washington Tacoma, Philip Hall

I argue that older CEOs perceive greater job-related pressure and that pro rata cash dividends treat shareholders more equally than discriminatory share repurchases. As a result, older CEOs pay out more cash via dividends and less cash via share repurchases to cater to shareholder needs. My results are consistent with CEOs under heavier pressure providing more cash dividends and less share repurchases. These results hold after controlling for firm age, size, leverage, growth, cash flow, profitability, and past payout history. The results are also robust to measuring job-related pressure as predicted CEO turnover probability. My results suggest that cash payout types and CEO age offer readily observable information on the outcome of corporate governance.

JEL classification: J63; G35

http://digitalcommons.tacoma.uw.edu/clsr_academic/2013/pres/5