Executive Financial Incentives and Payout Policy: Firm Responses to the 2003 Dividend Tax Cut

@article{Brown2004ExecutiveFI,
  title={Executive Financial Incentives and Payout Policy: Firm Responses to the 2003 Dividend Tax Cut},
  author={J. Brown and N. Liang and Scott J. Weisbenner},
  journal={NBER Working Paper Series},
  year={2004}
}
  • J. Brown, N. Liang, Scott J. Weisbenner
  • Published 2004
  • Economics, Business
  • NBER Working Paper Series
  • Using the 2003 reduction in dividend tax rates to identify an exogenous change in the after-tax value of dividends to shareholders, we test whether stock holdings among company executives is an important determinant of payout policy. We have three primary findings. First, we find that when top executives have greater stock ownership, and thus an incentive to increase dividends for personal liquidity reasons, there is a significantly greater likelihood of a dividend increase following the 2003… CONTINUE READING
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