CEO Political Ideology, Shareholder Primacy and Dividend Policy

Ali Bayat, Marc Goergen

Research output: Working paper


We argue that CEOs have different attitudes toward the firm’s stakeholders and that these differences in attitudes affect the firm’s decision making. We hypothesize that these differences stem from differences in political ideology: Liberal CEOs, as compared to their conservative counterparts, pay less attention to shareholders and this is reflected in dividend policy. To test the validity of our hypothesis, we measure CEO ideology by political donations. We study the CEOs of S&P 500 firms during 1997-2014 and find that firms with liberal CEOs are less likely to pay dividends and have significantly lower dividend payouts. In contrast,conservative CEOs pay more dividends, even if this requires redundancies.
Original languageEnglish
PublisherEuropean Corporate Governance Institute
Number of pages55
Publication statusPublished - 20 Jan 2020

Publication series

NameECGI Working Paper Series in Finance


  • CEO political ideology
  • corporate governance
  • dividend policy
  • stakeholder theory


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