CEO Political Ideology, Shareholder Primacy and Payout Policy

61 Pages Posted: 21 Jan 2020 Last revised: 4 Nov 2022

See all articles by Ali Bayat

Ali Bayat

University of Aberdeen

Marc Goergen

IE Business School, IE University; European Corporate Governance Institute (ECGI)

Date Written: October 7, 2022


This study investigates how CEO political ideology affects payout policy. We argue that CEO political ideology determines how CEOs prioritize the interests of shareholders and employees. We hypothesize that conservative CEOs are more likely to pay dividends, to pay higher dividends, and to conduct share repurchases. Studying the CEOs of S&P 500 firms during 1997-2019 and measuring CEO political ideology by CEO political donations, we can confirm our hypothesis. Nevertheless, we do not find that firms with conservative CEOs perform differently; nor are they less likely to cut dividends. We provide possible reasons for this pattern.

Keywords: CEO Political Ideology, Payout Policy, Dividend Policy, Share Repurchases, Corporate Governance, Stakeholders

JEL Classification: G35, G34

Suggested Citation

Bayat, Ali and Goergen, Marc, CEO Political Ideology, Shareholder Primacy and Payout Policy (October 7, 2022). European Corporate Governance Institute – Finance Working Paper No. 650/2020, Available at SSRN: or

Ali Bayat

University of Aberdeen ( email )

King's College
Aberdeen, AB24 3FX
United Kingdom

HOME PAGE: http://

Marc Goergen (Contact Author)

IE Business School, IE University ( email )

Finance Department
Maria de Molina, 12
Madrid, 28006


European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels


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