Does the use of stock incentives influence the payout policy of financial institutions? |
| |
Authors: | Aigbe Akhigbe Ann Marie Whyte |
| |
Institution: | 1. University of Akron, United States;2. University of Central Florida, United States |
| |
Abstract: | We investigate the link between payouts and stock incentives among financial institutions. We hypothesize that the varying degree of regulation across depositories, insurers, and securities firms is likely to influence the observed relation to the extent that regulation substitutes for other monitoring mechanisms. We find that managerial stock ownership is inversely related to dividend payouts across the institutions, consistent with the notion that managerial stock ownership is an effective method of reducing agency problems. We do not find evidence that the relationship occurs because of regulation since all institutions, regardless of the degree of regulation, exhibit the same inverse relationship between dividend payouts and management stock ownership. Our results suggest that, among financial institutions, regulation complements managerial stock ownership in minimizing agency problems. |
| |
Keywords: | |
本文献已被 ScienceDirect 等数据库收录! |
|