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Discussion of “Executive stock-based compensation and firms’ cash payout: the role of shareholders’ tax-related payout preferences”

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  • Terry Shevlin

    (University of Washington Foster School of Business)

Abstract

Aboody and Kasznik (Rev Acc Stud, this issue, 2008) develop and test cross-sectional predictions about how firms might respond to the 2003 dividend tax cuts. My discussion suggests some alternative firm responses, a restructuring of the main tests to be consistent with the theory and predictions, and an interpretation of the magnitude of the observed associations. Overall, the paper addresses an interesting issue, recognizes that executive compensation is endogenous in this event, and adds to the long literature on dividend payout policy.

Suggested Citation

  • Terry Shevlin, 2008. "Discussion of “Executive stock-based compensation and firms’ cash payout: the role of shareholders’ tax-related payout preferences”," Review of Accounting Studies, Springer, vol. 13(2), pages 252-265, September.
    • Handle: RePEc:spr:reaccs:v:13:y:2008:i:2:d:10.1007_s11142-008-9072-5
    DOI: 10.1007/s11142-008-9072-5
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    References listed on IDEAS

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    1. Lambert, Richard A. & Lanen, William N. & Larcker, David F., 1989. "Executive Stock Option Plans and Corporate Dividend Policy," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 24(4), pages 409-425, December.
    2. Jeffrey R. Brown & Nellie Liang & Scott Weisbenner, 2007. "Executive Financial Incentives and Payout Policy: Firm Responses to the 2003 Dividend Tax Cut," Journal of Finance, American Finance Association, vol. 62(4), pages 1935-1965, August.
    3. Mihir A. Desai & Li Jin, 2007. "Institutional Tax Clienteles and Payout Policy," NBER Working Papers 13283, National Bureau of Economic Research, Inc.
    4. Lambert, Ra & Larcker, Df & Verrecchia, Re, 1991. "Portfolio Considerations In Valuing Executive-Compensation," Journal of Accounting Research, John Wiley & Sons, Ltd., vol. 29(1), pages 129-149.
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