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Does CEO turnover influence dividend policy?

Author

Listed:
  • Barros, Victor
  • Guedes, Maria João
  • Santos, Pedro
  • Sarmento, Joaquim Miranda

Abstract

This study provides evidence of the influence of CEO turnover on dividend policy, using a sample of 4,043 firm-year observations of S&P500 constituents from 1992 to 2017. We find that firms are more likely to pay dividends following a CEO turnover, although the likelihood is offset in the case of underperforming firms. Dividends tend to be less stable and larger following a CEO turnover. Overall, our findings augment existing knowledge on the effect of CEO turnover in relation to various aspects of dividend policy; namely, the decision to pay a dividend, the dividend policy stability, and the dividend yield.

Suggested Citation

  • Barros, Victor & Guedes, Maria João & Santos, Pedro & Sarmento, Joaquim Miranda, 2022. "Does CEO turnover influence dividend policy?," Finance Research Letters, Elsevier, vol. 44(C).
    • Handle: RePEc:eee:finlet:v:44:y:2022:i:c:s1544612321001665
    DOI: 10.1016/j.frl.2021.102085
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    References listed on IDEAS

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    1. Seo, Sung Won & Lee, Jong Hwa, 2023. "Peer effect on dividends and return comovement," The North American Journal of Economics and Finance, Elsevier, vol. 67(C).

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    More about this item

    Keywords

    CEO turnover; Dividend policy; Dividend yield;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G35 - Financial Economics - - Corporate Finance and Governance - - - Payout Policy
    • G40 - Financial Economics - - Behavioral Finance - - - General

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