Abstract

http://ssrn.com/abstract=2054787
 
 

Footnotes (5)



 


 



Do Corporate Managers Skimp on Shareholders' Dividends to Protect their Own Retirement Funds?


Assaf Eisdorfer


University of Connecticut - Department of Finance

Carmelo Giaccotto


University of Connecticut - Department of Finance

Reilly S. White


Anderson School of Management

May 8, 2012


Abstract:     
This study is the first to show that the extent of executive pensions directly affects firm dividend policy. We argue and find that managers with high pension holdings are less likely to adapt a high dividend policy that can risk the managers’ future pension payouts. Using a hand-collected actuarial pension dataset of top executives at the largest US firms, we show that (i) dividend yield and dividend payout ratio are significantly lower when manager compensation relies more heavily on pension payouts; (ii) given a desirable payout policy, managers with large pension plans prefer the form of stock repurchases over cash dividend distributions; and (iii) the negative effect of pension on dividend is significantly weaker when pensions are protected in a prefunding rabbi trust. We show further that this agency behavior reduces firm performance.

Number of Pages in PDF File: 47

Keywords: Inside Debt, Executive Compensation, Capital Structure, Agency Costs, Investment Policy

JEL Classification: J33, M52

working papers series


Download This Paper

Date posted: May 8, 2012 ; Last revised: June 20, 2013

Suggested Citation

Eisdorfer, Assaf and Giaccotto, Carmelo and White, Reilly S., Do Corporate Managers Skimp on Shareholders' Dividends to Protect their Own Retirement Funds? (May 8, 2012). Available at SSRN: http://ssrn.com/abstract=2054787 or http://dx.doi.org/10.2139/ssrn.2054787

Contact Information

Assaf Eisdorfer
University of Connecticut - Department of Finance ( email )
School of Business
2100 Hillside Road
Storrs, CT 06269
United States
Carmelo Giaccotto
University of Connecticut - Department of Finance ( email )
School of Business
2100 Hillside Road
Storrs, CT 06269
United States
202-486-4360 (Phone)
202-486-0349 (Fax)
Reilly S. White (Contact Author)
Anderson School of Management ( email )
1 University of New Mexico
Albuquerque, NM 87131-1221
United States
Feedback to SSRN


Paper statistics
Abstract Views: 1,029
Downloads: 306
Download Rank: 55,359
Footnotes:  5

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo3 in 0.594 seconds