scholarly journals The Impact Of Outside Director Equity Compensation On Dividend Policy

2012 ◽  
Vol 28 (4) ◽  
pp. 743 ◽  
Author(s):  
Guy McClain

This study investigates the impact outside director equity compensation has on dividend policy. The analysis, conducted over a 4 year period from 1997-2000, is based on a sample of 89 first time adopters of equity compensation. The use of first time adopters attempts to control for the fact that many of the variables in the study are endogenously determined over time. The results indicate that as the percentage of equity compensation increases a firms propensity to pay dividends decreases as does the level of dividends. These results also indicate that firms with higher profitability pay a lower level of dividends. Taken together these result indicate that as managers send signals about positive performance, outside directors with a financial stake in the company decrease the level of monitoring by paying fewer dividends.

Author(s):  
Guy McClain

<span>This study investigates the impact outside director equity holdings have on the determinants of the mix of equity in outside director compensation plans. The analysis, conducted over a 4 year period from 1997-2000, is based on a sample of 89 first time adopters of equity compensation. The use of first time adopters attempts to control for the fact that many of the variables in the study are endogenously determined over time. The results indicate that the mix of equity is negatively associated with outside director holding, positively associated with the market-to-book ratio (a measure of the firms investment opportunities) and negatively associated with return on assets (a measure of CEO bargaining power). These findings suggest that the negotiation that takes place between the CEO and outside directors regarding governance is not only affected by the firms wanting to match the marginal productivity of directors with the opportunities of the firm, but also with the equity holdings of the directors.</span>


2012 ◽  
Vol 28 (6) ◽  
pp. 1315 ◽  
Author(s):  
Guy McClain

<span style="font-family: Times New Roman; font-size: small;"> </span><p style="margin: 0in 0.5in 0pt; text-align: justify; mso-pagination: none;" class="MsoNormal"><span style="color: black; font-size: 10pt; mso-themecolor: text1; mso-fareast-font-family: Calibri;"><span style="font-family: Times New Roman;">Using a sample of firms that are first time users of outside director equity compensation, I examine the effect of outsider director equity compensation on director monitoring by investigating firm performance and earnings management.<span style="mso-spacerun: yes;"> </span>My results, although lagged and not noticeable until year three, show that those firms that compensate outside directors with a higher percentage of equity compensation have higher stock performance, but lower accounting performance.<span style="mso-spacerun: yes;"> </span>These same firms also have lower discretionary accruals (i.e., less earnings management).<span style="mso-spacerun: yes;"> </span>These results suggest that outside directors do increase their monitoring by lowering discretionary accruals and thereby, lowering accounting earnings.<span style="mso-spacerun: yes;"> </span>In addition, this increased monitoring has a positive effect on stock performance.<span style="mso-spacerun: yes;"> </span>The results indicate that increased monitoring of accounting earnings results in lower discretionary accruals and thus lower, but more accurate earnings, and stock performance for the same period is not negatively impacted. </span></span></p><span style="font-family: Times New Roman; font-size: small;"> </span>


2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Helmi A. Boshnak

PurposeThis study examines the impact of board composition and ownership structure variables on dividend payout policy in Saudi Arabian firms. In particular, it aims to determine the effect of board size, independence and meeting frequency, in addition to chief executive officer (CEO) duality, and state, institutional, managerial, family, and foreign ownership on both the propensity to pay dividends and dividend per share for Saudi-listed firms over the period 2016–2019.Design/methodology/approachThe paper captures dividend policy with two measures, propensity to pay dividends and dividend per share, and employs a range of regression methods (logistic, probit, ordinary least squares (OLS) and random effects regressions) along with a two-stage least squares (2SLS) model for robustness to account for heteroscedasticity, serial correlation and endogeneity issues. The data set is a large panel of 280 Saudi-listed firms over the period 2016 to 2019.FindingsThe results underline the importance of board composition and the ownership structure in explaining variations in dividend policy across Saudi firms. More specifically, there is a positive relationship between the propensity to pay dividends and board-meeting frequency, institutional ownership, firm profitability and firm age, while the degree of board independence, firm size and leverage exhibit a negative relation. Further, dividend per share is positively related to board meeting frequency, institutional ownership, foreign ownership, firm profitability and age, while it is negatively related to CEO duality, managerial ownership, and firm leverage. There is no evidence that family ownership exerts an impact on dividend payout policy in Saudi firms. The findings of this study support agency, signalling, substitute and outcome theories of dividend policy.Research limitations/implicationsThis study offers an important insight into the board characteristic and ownership structure drivers of dividend policy in the context of an emerging market. Moreover, the study has important implications for firms, managers, investors, policymakers, and regulators in Saudi Arabia.Originality/valueThis paper contributes to the existing literature by providing evidence on four board and five ownership characteristic drivers of dividend policy in Saudi Arabia as an emerging stock market, thereby improving on less comprehensive previous studies. The study recommends that investors consider board composition and ownership structure characteristics of firms as key drivers of dividend policy when making stock investment decisions to inform them about the propensity of investee firms to pay dividends and maintain a given dividend policy.


2013 ◽  
Vol 11 (1) ◽  
pp. 81-91
Author(s):  
Tsun-Jui Hsieh ◽  
Yu-Ju Chen

This paper investigates the impact of outside directors on firm performance during legal transitions and examines how the roles of family business and director compensation influence board efficacy. By using Taiwanese listed companies as our sample, the empirical results show that outside directors who are appointed by legal mandate have less positive impacts on firm performance than outside directors appointed voluntarily. Family business weakens the positive impact of outside director on firm performance. The evidence further suggests that director compensation contributes to firm performance, particularly when outside directors are voluntarily appointed. The findings provide western managers with an understanding of how the typical Chinese family business affects board independence. We also demonstrate and incorporate the cultural and the ownership characteristics into the analysis to present a country-specific pattern that should be informative for foreign investors who are concerned about the quality of corporate governance in East Asia.


2021 ◽  
Vol 5 (1) ◽  
pp. 65-72
Author(s):  
Murat Yıldırım

Identifying factors that influence well-being are fruitful for improving the knowledge held about the correlates and predictors of well-being in both practice and theory. This research for the first time aimed to investigate whether irrational happiness beliefs, a newly presented construct, contribute to the affective components of subjective well-being over time. The sample included 103 undergraduate students (88 females and 15 males) whose ages varied from 18 to 29 years (M = 19.39 ±1.62). Participants completed measures of irrational happiness beliefs, positive affect, and negative affect both at Time 1 and Time 2 over three months apart. The findings showed that irrational happiness beliefs were significantly negatively related to positive affect only at Time 1. However, the research failed to provide evidence regarding the value of irrational happiness beliefs in predicting positive and negative affect over time. The results suggest that the impact of irrational happiness beliefs upon well-being may occur momentarily not over time. Implications and limitations of the findings are discussed and directions for future studies are provided.


2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Sefa Takmaz ◽  
Pınar Evrim Mandaci ◽  
M. Banu Durukan

PurposeThe purpose of this paper is to empirically analyse the propensity to pay dividends and investigate whether the catering theory is valid in an emerging market.Design/methodology/approachThe sample of this study comprises listed firms on the stock market of Turkey, Borsa Istanbul, with 2,438 observations during the period 1999–2015. In line with previous studies in the literature, appropriate control variables are used that may have an impact on Turkish firms' dividend policy. Control variables are examined in the likelihood of paying dividends by using Fama–Macbeth (1973) style cross-sectional logistic regressions. In addition, the linkage between the dividend premium and the propensity to pay is revealed to test the validity of the catering theory.FindingsThe findings of the study confirm the tenets of the catering theory for Turkey. When a positive dividend premium exists, that is when investors demand dividend, firms cater them and distribute dividend; on the contrary, when there is no demand, firms prefer not to pay. The effect of catering incentives on the dividend policy provides useful information for managers because the catering theory claims that investors' demand for dividends has an impact on the valuation of firms.Originality/valueIn the aftermath of the 2001 financial crisis, Turkey implemented far-reaching reforms and policy initiatives to improve the efficiency of capital markets and to overcome the obstacles sourcing from their culture and civil law origin. With the adoption of these major economic and structural reforms, as a civil law origin country, Turkey has managed to ameliorate the protection of investors as in common law countries. Ferris et al. (2009) state that the catering theory is applicable to firms in common law countries but not in civil law countries. In addition, prior research is not so extensive regarding the impact of catering incentives on the dividend policy of firms in emerging markets. The results of the analyses suggest that the catering theory is valid for Turkey as a civil law origin emerging country, and to the best of authors' knowledge, this study is the first to test the catering theory in the Turkish capital markets.


Blood ◽  
2015 ◽  
Vol 126 (23) ◽  
pp. 1740-1740 ◽  
Author(s):  
Caspar da Cunha-Bang ◽  
Jacob Simonsen ◽  
Klaus Rostgaard ◽  
Christian H Geisler ◽  
Henrik Hjalgrim ◽  
...  

Abstract Background The treatment of chronic lymphocytic leukemia (CLL) is in rapid transition. As single agents, Fludarabine (F) was shown to be superior to chlorambucil (Rai, NEJM, 2000). Soon after F with Cyclophosphamide (C), showed superiority to F alone (Eichhorst, Blood, 2006; Flinn, JCO, 2007, Catovsky, Lancet, 2007). Subsequently, the addition of CD20 antibody rituximab (R) to FC for the first time showed a survival benefit for fit patients in a clinical trial (Hallek, Lancet, 2010). Likewise, in unfit patients the addition of CD20 antibodies to chlorambucil led to increased overall survival (Goede, NEJM, 2014). Eventually, BCR-targeted treatment for patients harboring TP53 aberrations demonstrated promising results (Farooqui, Lancet Onc, 2015). Here we assess the impact of these successive changes of therapy on the survival of patients with CLL in a Danish population-based cohort. Methods We studied the survival of a population-based cohort of CLL patients reported to the Danish Cancer Registry 1978-2013. Patients were categorized according to year of diagnosis from 1978-1994, 1995-2000, 2001-2005 and 2006-2013. For each CLL patient, we randomly selected 50 controls from the general population matched on age, gender and municipality. Kaplan MeierÕs survival curves and Hazard ratios (HR) and 95% confidence interval (95%CI) for death since time of diagnosis /matching date for controls were calculated. Change in survival probability relative to the controls with stratification on gender, age and calendar period of diagnosis was assessed. Results In total, 10500 patients were diagnosed with CLL in Denmark from 1978 to 2013 as follows: 1978-1994: 4651, 1995-2000: 1622, 2001-2005: 1664 and 2006-2013: 2563. Thus, the reported incidence of CLL increased slightly after year 2000. Overall, we observed a continuously decreasing risk of death for patients with CLL compared to matched controls, with HRs from 3.47 (3.37 - 3.58) to 2.09 (1.96 - 2.24) for patients diagnosed 1978-1994 and 2005-2013, respectively. In inter group analyses, a significant stepwise reduction in risk of death was observed for each period (Figure 1). In all age groups and calendar periods, male patients had an inferior survival compared to female patients and younger patients survived longer than older patients (p<0.0001). Discussion A significant improvement in survival probability for patients with CLL over time was found. This coincides with the introduction of FCR as standard therapy for younger patients with CLL (approval by EMA in 2009, affecting the cohort diagnosed 2006-2013). Significant survival improvement was also observed in the 2001-2005 cohort, possibly due to a shift to combination chemotherapy. Also for elderly patients, otherwise expected to get less intensive treatment in part due to co-morbidities, the survival improved over time. This may be accounted for by the introduction of semi-intensive chemotherapy like bendamustine, reduced intensity FC(R) and more recently chlorambucil combined with CD20-targeting antibodies. For the first time, we here present population-based data showing significant improvement in survival for patients with CLL in parallel with the introduction of new chemo-immunotherapeutic regimens into clinical practice. These data substantiate the reported increased survival for patients treated with chemo-immunotherapy in clinical studies. Further investigation and cross-reference with treatment databases are warranted in order to assess the impact of new targeted treatment options for CLL. Figure 1. Overall survival for patients (70-79 and 50-59 years), lower four curves; upper four curves represent matched controls. Figure 1. Overall survival for patients (70-79 and 50-59 years), lower four curves; upper four curves represent matched controls. Disclosures Geisler: GlaxoSmithKline: Consultancy; Novartis: Consultancy; Janssen: Consultancy; Celgene: Consultancy; Gilead: Consultancy; Roche: Consultancy. Niemann:Novartis: Other: Travel grant; Janssen: Consultancy; Roche: Consultancy; Gilead: Consultancy.


Cliometrica ◽  
2021 ◽  
Author(s):  
Facundo Alvaredo ◽  
A. B. Atkinson

AbstractThere have been important studies of recent income inequality and of poverty in South Africa, but very little is known about the long-run trends over time. There is speculation about the extent of inequality when the Union of South Africa was formed in 1910, but no hard evidence. In this paper, we provide evidence that is partial—being confined to top incomes—but which for the first time shows how the income distribution changed on a (near) annual basis from 1913 onwards. We present estimates of the shares in total income of groups such as the top 1% and the top 0.1%, covering the period from colonial times to the twenty-first century. For a number of years during the apartheid period, we have data classified by race. The estimates for recent years bear out the picture of South Africa as a highly unequal country, but allow this to be placed in historical and international context. The time series presented here will, we hope, provide the basis for detailed investigation of the impact of South African institutions and policies, past and present. But the similarity of the changes over time in top incomes across the four ex-dominions suggests that national developments have to be seen in the light of common global forces.


2019 ◽  
Vol 17 (1) ◽  
pp. 116-124
Author(s):  
Mark Bertus ◽  
John S. Jahera Jr. ◽  
Keven Yost

This paper empirically analyzes the impact of the Sarbanes-Oxley Act on the relation between measures of corporate governance and a firm’s dividend policy in the U.S. equity market. Using the IRRC database, we find that there is a statistically significant relation between governance measures and a firm’s dividend policy in the years prior to the introduction of the Sarbanes-Oxley Act. However, following Sarbanes-Oxley, the relation between a firm’s governance structure and dividend policy changes. In particular, shareholders’ rights and the proportion of outside directors are no longer significant in explaining a firm’s dividend policy.


Crisis ◽  
2011 ◽  
Vol 32 (2) ◽  
pp. 99-105 ◽  
Author(s):  
Friedrich Martin Wurst ◽  
Isabella Kunz ◽  
Gregory Skipper ◽  
Manfred Wolfersdorf ◽  
Karl H. Beine ◽  
...  

Background: A substantial proportion of therapists experience the loss of a patient to suicide at some point during their professional life. Aims: To assess (1) the impact of a patient’s suicide on therapists distress and well-being over time, (2) which factors contribute to the reaction, and (3) which subgroup might need special interventions in the aftermath of suicide. Methods: A 63-item questionnaire was sent to all 185 Psychiatric Clinics at General Hospitals in Germany. The emotional reaction of therapists to patient’s suicide was measured immediately, after 2 weeks, and after 6 months. Results: Three out of ten therapists suffer from severe distress after a patients’ suicide. The item “overall distress” immediately after the suicide predicts emotional reactions and changes in behavior. The emotional responses immediately after the suicide explained 43.5% of the variance of total distress in a regression analysis. Limitations: The retrospective nature of the study is its primary limitation. Conclusions: Our data suggest that identifying the severely distressed subgroup could be done using a visual analog scale for overall distress. As a consequence, more specific and intensified help could be provided to these professionals.


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