Elżbieta Bukalska, Gabriela Dycha
COMPENSATION OF NARCISSISTIC CEOs WITH STAKE IN EQUITY: A STUDY OF POLISH COMPANIES
Abstract:
Background: Behavioural personal characteristics are proven to have an impact on corporate decisions. There have been many behavioural biases and fallacies identified so far. One of the important behavioral traits is narcissism. Managerial narcissism and the belief in their own grandiosity affect their corporate behaviour. Previous research finds that narcissistic leaders have higher compensation. However, previous research takes into account only job-related compensation and ignores the common fact that the CEO is often the owner of the company. The aim of our research is to explore the impact of a narcissistic CEO who has a financial stake in the equity on their total income. Our research refers to the situation when narcissistic CEOs’ labour and capital are involved in the same company, which is quite common in a business environment. Thus, the compensation consists of two parts: job-related (salary) and capital-related (dividend).
Methods: We have conducted our research on a sample of 160 companies from the Warsaw Stock Exchange over six years (2017-2022). We have performed statistical analysis of data with descriptive statistics, correlation matrix, and regression analysis.
Results: We have found that a narcissistic CEO with a stake in the company negatively affects both job and total compensation.
Conclusions: We believe that the lower compensation of narcissistic CEOs is the price they pay in return for both their prestige and the sound financial standing of the company. The financial soundness of the company allows them to stay in power (by meeting owners’ expectations), and remain in the centre of attention.
Structure of the paper: The paper starts with a literature review on the issues included in the research, especially: CEO compensation, CEO ownership, and CEO narcissism. Then, we present our research plan and the methodology. Later, we report our findings and discuss our findings with previous ones. Finally, we present the conclusions.
Cordelia Onyinyechi Omodero
THE ROLE OF CORPORATE TAX, EARNINGS
AND DEBT IN DETERMINING DIVIDEND POLICY OF FIRMS
Abstract:
Dividend policy is a critical component of corporate finance strategy, which, when properly implemented, will allow firms to grow. In general, equity holders or corporate fund providers expect a favourable dividend policy as a motivation and reward for their investment in a company. Despite this golden expectation, there are still certain factors that invariably determine the outcome of firms' dividend policies. This study investigates the influence of corporation tax, profits, and debt in determining business dividend policy. In this paper, we argue that dividend policy is influenced not only by corporate taxation, but also by other factors such as profitability and debt. The panel statistics are derived from the businesses' public financial statements, which cover the years 2016 - 2020. To evaluate the panel data, the study uses Pairwise Granger Causality Tests, the Hausman check, the collective outcome prototypical, and the coincidental upshot model. Four null premises are examined, and the results reveal that corporate taxes and earnings have an affirmative impact on businesses' surplus payments. Contrarily, debt and interest expenditures have no momentous inspiration on surplus disbursement. The analysis shows that dividend payments and debt are diametrically opposed. The paper suggests equity financing to enhance organizations’ business expansion.
