Open Access. Powered by Scholars. Published by Universities.®
Articles 1 - 1 of 1
Full-Text Articles in Business
Payout Policy, Managerial Perquisites, And Sticky Sg&A Costs, Deborah Smith
Payout Policy, Managerial Perquisites, And Sticky Sg&A Costs, Deborah Smith
Business Faculty Publications
Background
Sticky SG&A costs provide a novel opportunity to investigate whether payout policy serves as a remedy for management overspending on perquisites that are embedded in SG&A expenses. Payout policy, especially under strong governance, may reduce overspending. Another possibility is that management may use sales declines opportunistically to repurchase shares when sales are expected to rebound.
Methods
Regression analysis is used to examine the effect of payout mechanisms (dividends, share repurchases, and combinations thereof) and shareholder rights (EIndex) to determine whether managerial overspending on perquisites is reduced through payout policy.
Results
The results indicate that dividends and share repurchases are …