Share Repurchases, Dividends and Executive Options: the Effect of Dividend Protection
Abstract"We study the determinants of share repurchases and dividends in Finland. We find that higher foreign ownership serves as a determinant of share repurchases and suggest that this is explained by the different tax treatment of foreign and domestic investors. Further, we also find support for the signalling and agency cost hypotheses for cash distributions. The fact that 41% of the option programmes in our sample are dividend protected allows us to test more directly the 'substitution/managerial wealth' hypothesis for the choice of distribution method. When options are dividend protected, the relationship between dividend distributions and the scope of the options programme turns to a significantly positive one instead of the negative one documented in US data". Copyright Blackwell Publishers Ltd, 2006.
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Bibliographic InfoArticle provided by European Financial Management Association in its journal European Financial Management.
Volume (Year): 12 (2006)
Issue (Month): 1 ()
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Web page: http://www.blackwellpublishing.com/journal.asp?ref=1354-7798
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- Derek Jones & Panu Kalmi & Mikko Mäkinen, 2010.
"The productivity effects of stock option schemes: evidence from Finnish panel data,"
Journal of Productivity Analysis,
Springer, vol. 33(1), pages 67-80, February.
- Jones, Derek C. & Kalmi, Panu & Mäkinen, Mikko, 2006. "The Productivity Effects of Stock Option Schemes: Evidence from Finnish Panel Data," Discussion Papers 1026, The Research Institute of the Finnish Economy.
- Korkeamaki, Timo & Liljeblom, Eva & Pasternack, Daniel, 2010. "Tax reform and payout policy: Do shareholder clienteles or payout policy adjust?," Journal of Corporate Finance, Elsevier, vol. 16(4), pages 572-587, September.
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