CEO Dividend Protection

46 Pages Posted: 13 Jul 2013 Last revised: 22 Sep 2017

See all articles by Dan Zhang

Dan Zhang

Oslo and Akershus University College - Oslo Metropolitan University; BI Norwegian Business School

Date Written: August 15, 2017


This paper studies CEO dividend protection, an important element in the executive compensation package that protect CEOs' compensation from stock price drops due to dividend payments. First, I show that there is large variation among S&P 500 firms in whether they provide dividend protections to their CEOs or not. Second, CEO dividend protection is positively associated with firms' dividend payout. Third, a time series analysis suggests that dividend protection is implemented prior to a firm increasing dividends. Finally, there is no evidence suggesting that CEO dividend protection affects other corporate policies, such as cash holdings and investment.

Keywords: Payout policy, Executive compensation, Dividend protection

JEL Classification: G30, M52

Suggested Citation

Zhang, Dan, CEO Dividend Protection (August 15, 2017). Available at SSRN: or

Dan Zhang (Contact Author)

Oslo and Akershus University College - Oslo Metropolitan University ( email )

PO Box 4, St Olavs plass
Oslo, 0130

BI Norwegian Business School ( email )

Nydalsveien 37
Oslo, 0442


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