Do Managerial Motives Impact Dividend Decisions in REITs?

Do Managerial Motives Impact Dividend Decisions in REITs? Conflict of interest between shareholders (principal) and managers (agent) is a potential weakness of the modern corporate form. Various monitoring mechanisms—pay for performance compensation schemes, mix of cash compensation and long term compensation, the independence of the board of directors, the market for takeovers, and capital structure—have been developed to discipline management and motivate them to maximize shareholder wealth. We test the hypothesis that dividend payout levels reflect the quality of and motivation for managerial decision making and are a function of performance and monitoring effectiveness. Consistent with this hypothesis, our analyses indicate that dividend payout, and dividend yield are functions of corporate performance, board structure, CEO tenure, and CEO ownership of company shares. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png The Journal of Real Estate Finance and Economics Springer Journals

Do Managerial Motives Impact Dividend Decisions in REITs?

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Publisher
Kluwer Academic Publishers
Copyright
Copyright © 2006 by Springer Science + Business Media, Inc.
Subject
Economics; Regional/Spatial Science; Financial Services
ISSN
0895-5638
eISSN
1573-045X
D.O.I.
10.1007/s11146-006-6805-8
Publisher site
See Article on Publisher Site

Abstract

Conflict of interest between shareholders (principal) and managers (agent) is a potential weakness of the modern corporate form. Various monitoring mechanisms—pay for performance compensation schemes, mix of cash compensation and long term compensation, the independence of the board of directors, the market for takeovers, and capital structure—have been developed to discipline management and motivate them to maximize shareholder wealth. We test the hypothesis that dividend payout levels reflect the quality of and motivation for managerial decision making and are a function of performance and monitoring effectiveness. Consistent with this hypothesis, our analyses indicate that dividend payout, and dividend yield are functions of corporate performance, board structure, CEO tenure, and CEO ownership of company shares.

Journal

The Journal of Real Estate Finance and EconomicsSpringer Journals

Published: Mar 29, 2006

References

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