Executive financial incentives and payout policy: Firm responses to the 2003 dividend tax cut

Journal of Finance

Volumn 62, Issue 4, 2007, Pages 1935-1965

  Brown, Jeffrey R ^a   Liang, Nellie ^b   Weisbenner, Scott ^a  

^a UNIVERSITY OF ILLINOIS AT URBANA CHAMPAIGN   (United States)

^b FEDERAL RESERVE BOARD   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 34547917652     PISSN: 00221082     EISSN: 15406261     Source Type: Journal    
DOI: 10.1111/j.1540-6261.2007.01261.x     Document Type: Article

References (35)

1. Almeida, Heitor, Murillo Campello, and Michael Weisbach, 2004, The cash flow sensitivity of cash, Journal of Finance 59, 1777 1804.
2. Amromin, Gene, Paul Harrison, and Steve Sharpe, 2005, How did the 2003 dividend tax cut affect stock prices? Board of Governors of the Federal Reserve System Working Paper 2005-61.
3. Auerbach, Alan, and Kevin Hassett, 2005, The 2003 dividend tax cuts and the value of the firm: An event study, National Bureau of Economic Research, Inc., NBER Working Paper 11449.
4. Baker, George, and Brian Hall, 2004, CEO incentives and firm size, Journal of Labor Economics 22, 767 798.
5. Bettis, Carr, John Bizjak, and Michael Lemmon, 2001, Managerial ownership, incentive contracting, and the use of zero-cost collars and equity swaps by corporate insiders, Journal of Financial and Quantitative Analysis 36, 345 370.
6. Blouin, Jennifer, Jana Raedy, and Douglas Shackelford, 2004, The initial impact of the 2003 reduction in the dividend tax rate, Working paper, University of Pennsylvania and University of North Carolina.
7. Boyle, Glenn, and Graeme Guthrie, 2003, Investment, uncertainty and liquidity, Journal of Finance 58, 2143 2166.
8. Brav, Alon, John Graham, Campbell Harvey, and Roni Michaely, 2005, Payout policy in the 21st century, Journal of Financial Economics 77, 483 527.
9. Brown, Jeffrey, David Cummins, Christopher Lewis, and Ran Wei, 2004, An empirical analysis of the economic impact of federal terrorism reinsurance, The Journal of Monetary Economics 51, 861 898.
10. Chetty, Raj, and Emmanuel Saez, 2005, Dividend taxes and corporate behavior: Evidence from the 2003 dividend tax cut, Quarterly Journal of Economics 120, 791 833.
11. Core, John, and Wayne Guay, 1999, The use of equity grants to manage optimal equity incentive levels, Journal of Accounting and Economics 28, 151 184.
12. Cornett-Millon, Marcia, and Hassan Tehranian, 1990, An examination of the impact of the Garn-St. Germain Depository Institutions Act of 1982 on commercial banks and savings and loans, Journal of Finance 45, 95 111.
13. Cutler, David, 1988, Tax reform and the stock market: An asset price approach, American Economic Review 78, 1107 1117.
14. DeAngelo, Harry, Linda DeAngelo, and Douglas Skinner, 2000, Special dividends and the evolution of dividend signaling, Journal of Financial Economics 57, 309 354.
15. Dittmar, Amy, and Robert Dittmar, 2002, Stock repurchase waves: An explanation of the trends in aggregate corporate payout policy, Working paper, University of Michigan.
16. Economic Report of the President, 2003, Together with the Annual Report of the Council of Economic Advisors (Washington : Government Printing Office).
17. Fama, Eugene, and Kenneth French, 1992, The cross-section of expected returns, Journal of Finance 47, 427 465.
18. Fama, Eugene, and Kenneth French, 2001, Disappearing dividends: Changing firm characteristics or lower propensity to pay? Journal of Financial Economics 60, 3 44.
19. Fenn, George, and Nellie Liang, 2001, Corporate payout policy and managerial stock incentives, Journal of Financial Economics 60, 45 72.
20. Gillan, Stuart, and Laura Starks, 1998, A survey of shareholder activism: Motivation and empirical evidence, Contemporary Finance Digest 2, 10 34.
21. Grullon, Gustavo, and Roni Michaely, 2002, Dividends, share repurchases, and the substitution hypothesis, Journal of Finance 57, 1649 1684.
22. Jagannathan, Murali, Clifford Stephens, and Michael Weisbach, 2000, Financial flexibility and the choice between dividends and share repurchases, Journal of Financial Economics 57, 355 384.
23. James, Christopher, 1983, An analysis of intra-industry differences in the effect of regulation: The case of deposit rate ceilings, Journal of Monetary Economics 12, 417 432.
24. Jensen, Michael, 1986, Agency costs of free cash flow, corporate finance, and takeovers, American Economic Review 76, 323 329.
25. Jolls, Christine, 1998, Stock repurchases and incentive compensation, National Bureau of Economic Research, Inc., NBER Working Paper 6467.
26. Julio, Brandon, and David Ikenberry, 2004, Reappearing dividends, Journal of Applied Corporate Finance, 16, 89 100.
27. Kahle, Kathleen, 2002, When a buyback isn't a buyback: Open-market repurchases and employee options, Journal of Financial Economics 63, 235 261.
28. Lambert, Richard, William Lanen, and David Larcker, 1989, Executive stock option plans and corporate dividend policy, Journal of Financial Quantitative Analysis 24, 409 425.
29. Lintner, John, 1956, Distributions of incomes of corporations among dividends, retained earnings, and taxes, American Economic Review 46, 96 114.
30. Murphy, Kevin, 1999, Executive compensation, in O. Ashenfelter and D. Card, eds Handbook of Labor Economics (North Holland, Amsterdam).
31. Nam, Jouahn, Jun Wang, and Ge Zhang, 2004, The impact of dividend tax cut and managerial stock holdings on firms' dividend policy, Working paper, Lubin School of Business, Pace University.
32. Perez-Gonzalez, Francisco, 2003, Large shareholders and dividends: Evidence from U.S. tax reforms, Working paper, Columbia University.
33. Schumann, Laurence, 1988, State regulation of takeovers and shareholder wealth: The case of New York's 1985 takeover statutes, RAND Journal of Economics 19, 557 567.
34. Shefrin, Hersh, and Meir Statman, 1984, Explaining investor preference for cash dividends, Journal of Financial Economics 13, 253 282.
35. Weisbenner, Scott, 2000, Corporate share repurchases in the mid-1990s: What role do stock options play? Working paper, University of Illinois at Urbana-Champaign.