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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 …
Governance Structure And Performance Of Private Family Firms, Tarun Mukherjee, Vighneshwara Swami, Wei Wang
Governance Structure And Performance Of Private Family Firms, Tarun Mukherjee, Vighneshwara Swami, Wei Wang
Business Faculty Publications
A debate exists on the issue of whether a governance system is value additive or even necessary for a privately-held firm. One side of the debate suggests that, since agency problems do not exist in a small private firm, it does not need a costly governance system. The other side argues that a private firm indeed faces agency costs in the form of altruism and, therefore, could extract net gains from a governance system. In this paper, we empirically investigate whether a good governance system crates or destroys value of private family firms. We first demonstrate that a multifamily firm …