CEO Political Ideology, Shareholder Primacy and Dividend Policy

CEO Political Ideology, Shareholder Primacy and Dividend Policy

Ali Bayat, Marc Goergen

Series number :

Serial Number: 
650/2020

Date posted :

January 20 2020

Last revised :

January 20 2020
SSRN Share

Keywords

  • CEO Political Ideology • 
  • dividend policy • 
  • Stakeholder Theory • 
  • Corporate governance

We argue that CEO political ideology affects how CEOs prioritize the needs of various stakeholders,  including  shareholders  and  employees.  We hypothesize that conservative CEOs are more likely to pay dividends as well as paying high- er  dividends.  We  measure  CEO  ideology  by political  donations.  We  study  the

CEOs of S&P 500 firms during 19972019. We find confirmation of our hypothesis. Moreover, conservative CEOs are more likely to make share repurchases. Nevertheless, we do not find that firms with conservative CEOs perform differ- ently; nor are nonconservative CEOs more likely to cut dividends. We provide possible reasons for this.

 

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Authors

Dr
Real name:
Ali Bayat
University of Aberdeen