CEO and CFO equity compensation and dividend payout over the firm lifecycle

Derek Ding, Chloe Ho, Millicent Chang

Research output: Contribution to journalArticlepeer-review

2 Citations (Scopus)


We examine the separate and joint effects of CEO and CFO equity compensation on the dividend payout decision, taking into account changes in the relationship over the firm's lifecycle. Compensation contracts and dividend payout both are used to reduce agency costs, which change over a firm's lifecycle. Studies report a negative association between CEO equity compensation and dividend payout, suggesting a substitutionary relationship. Our results show that when the two are considered jointly, CFO equity compensation dominates CEO compensation, indicating the need for sophisticated financial expertise in the dividend decision. The relationship appears only in mature firms, signifying that agency problems are of most concern during the mature stage of the firm lifecycle.
Original languageEnglish
Article number100562
JournalGlobal Finance Journal
Early online date2 Aug 2020
Publication statusPublished - Aug 2021


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