Repository logo
 

CEO‐employee pay ratio disclosure and dividend policy

Published version
Peer-reviewed

Repository URI

https://www.repository.cam.ac.uk/handle/1810/388498

Repository DOI

Thumbnail Image

Files

Bibliographic metadata (6.5 KB)
Primary Published version (1.31 MB)

Type

Article

Change log

Authors

Abstract

Abstract We examine whether and how the magnitude of the CEO pay ratio affects dividend policy in the context of inequality‐averse investors. Our results demonstrate a positive association between the two and remain robust to endogeneity concerns. We find that the CEO pay ratios positively affect dividends irrespective of whether CEO compensation contracts motivate risk‐averse or risk‐taking policy choices. This non‐diverse effect on dividend policy across CEOs with different pay structures contradicts previous studies and highlights the wealth effect resulting from the SEC mandate. Further analyses reveal a negative effect of the pay ratio on cash holdings and investment inefficiency.

Description

Publication status: Published

Keywords

3501 Accounting, Auditing and Accountability, 3502 Banking, Finance and Investment, 35 Commerce, Management, Tourism and Services, 3507 Strategy, Management and Organisational Behaviour

Journal Title

The Journal of Financial Research

Conference Name

Journal ISSN

0270-2592
1475-6803

Volume Title

Publisher

Wiley

Publisher DOI

https://doi.org/10.1111/jfir.70008

Rights and licensing

undefined
Except where otherwised noted, this item's license is described as http://creativecommons.org/licenses/by/4.0/

Collections

Jisc Publications Router