Date of Award


Degree Type


Degree Name

Master of Science (MS)


Economics and Finance

Committee Chair(s)

Tyler Brough


Tyler Brough


Jared DeLisle


Briggs Depew


In recent decades, many managers and executives have received company stock and stock options as a portion of their pay. As the incidence of this phenomenon increased, it became evident that insiders needed a way to diversify their holdings. One way this could be accommodated is through the issuance of dividends. This paper examined how executive stock ownership and managerial power impacted a firm’s dividend policy. Specifically, it examined the power of an executive as measured by the G index. It further took into account the current level of ownership for a particular manager, as well as the value of their shares as a percentage of their total compensation, and how these measures affected the relationships. We hypothesized that greater managerial power and ownership would result in greater dividends issued per share as a means to diversify the managers’ portfolio of wealth. In order to conduct this analysis, data on executive compensation, firm characteristics, and dividend policy was obtained from Compustat and Institutional Shareholder Services (ISS) within Wharton Research Data Services (WRDS). Econometric techniques such as regression analysis, panel vector auto-regression, and Granger causality tests were employed to test this hypothesis. Results looking at both correlation and causality between the power measure, level of ownership, and dividends per share were discussed.