{"id":{"repo_id":"uiuc","oai_identifier":"oai:www.ideals.illinois.edu:2142/107865"},"canonical_url":"https://search.dev.ndltd.org/etd/uiuc/oai:www.ideals.illinois.edu:2142/107865","repository":{"repo_id":"uiuc","name":"University of Illinois - Urbana-Champaign","base_url":"https://www.ideals.illinois.edu/oai-pmh"},"display":{"title":"Essays on executive compensation and dividend policy","abstract":"This dissertation contains two chapters: the first chapter examines the impact of sovereign wealth fund (SWF) ownership on firm executive compensation and the second examines the impact that various dividend payout policies have on stock prices. Below are the individual abstracts for each chapter. CHAPTER 1: Sovereign wealth funds are major players in the global markets. We contribute to the corporate governance literature by examining the possible value SWFs bring to their domestic holdings. We examine in particular the impact of SWF ownership on firm executive compensation. Using data on Kuwaiti SWFs, we find that having an SWF as an ultimate owner diminishes pay–performance sensitivity. This pay performance diminishment is greater, the higher the cash flow rights of the SWF. Moreover, having the SWF as an ultimate owner in a firm’s ownership chain does not alleviate the adverse effects of the divergence in cash-flow and control rights. This evidence supports the notion that SWFs impose agency costs on their targets. (JEL G15, G23, G32, G34, G38) CHAPTER 2: Previous research, specifically Larkin et al. (2017), has examined the relationship between dividend smoothing and stock prices, coming to a ‘puzzling’ conclusion that investors do not value firms that smooth their dividends over those that do. I revisit this question by considering the level of payout in an analysis of dividend smoothing. I use a modified version of the payout ratio and a novel way of categorizing low/high payout firms to produce two major findings. First, investors value firms that put an effort to payout more of their earnings higher than firms that do not; this payout price premium is present in all industries. Second, investors do value high-payout dividend-smoothing firms more than low-payout dividend smoothers. Finally, by taking the extreme portfolios on the payout and smoothness spectrum, I follow the performance of a portfolio of high-payout high-smoothing minus low-payout low-smoothing firms and find clear and significant negative performance of this portfolio, which depicts the price premium I am testing for. This performance is not explained by Fama-French 5 factor or Carhart momentum factor models. (JEL G32, G35).","abstract_html":"This dissertation contains two chapters: the first chapter examines the impact of sovereign wealth fund (SWF) ownership on firm executive compensation and the second examines the impact that various dividend payout policies have on stock prices. Below are the individual abstracts for each chapter. CHAPTER 1: Sovereign wealth funds are major players in the global markets. We contribute to the corporate governance literature by examining the possible value SWFs bring to their domestic holdings. We examine in particular the impact of SWF ownership on firm executive compensation. Using data on Kuwaiti SWFs, we find that having an SWF as an ultimate owner diminishes pay–performance sensitivity. This pay performance diminishment is greater, the higher the cash flow rights of the SWF. Moreover, having the SWF as an ultimate owner in a firm’s ownership chain does not alleviate the adverse effects of the divergence in cash-flow and control rights. This evidence supports the notion that SWFs impose agency costs on their targets. (JEL G15, G23, G32, G34, G38) CHAPTER 2: Previous research, specifically Larkin et al. (2017), has examined the relationship between dividend smoothing and stock prices, coming to a ‘puzzling’ conclusion that investors do not value firms that smooth their dividends over those that do. I revisit this question by considering the level of payout in an analysis of dividend smoothing. I use a modified version of the payout ratio and a novel way of categorizing low/high payout firms to produce two major findings. First, investors value firms that put an effort to payout more of their earnings higher than firms that do not; this payout price premium is present in all industries. Second, investors do value high-payout dividend-smoothing firms more than low-payout dividend smoothers. Finally, by taking the extreme portfolios on the payout and smoothness spectrum, I follow the performance of a portfolio of high-payout high-smoothing minus low-payout low-smoothing firms and find clear and significant negative performance of this portfolio, which depicts the price premium I am testing for. This performance is not explained by Fama-French 5 factor or Carhart momentum factor models. (JEL G32, G35).","abstract_has_math":false,"creators":["AlBader, Sulaiman H"],"institution":"University of Illinois at Urbana-Champaign","degree_name":"Ph.D.","degree_level":"Dissertation","degree_discipline":"Finance","degree_department":null,"school":null,"contributors":["Choi, Jaewon","Almeida, Heitor","Wu, Yufeng","Huang, Jiekun"],"advisors":[],"committee_chairs":[],"committee_members":[],"year":2020,"date_issued":"2020-08-26T21:54:10Z","date_published":"2020-08-26T21:54:10Z","updated_at":"2026-07-22T22:24:47Z","subjects":["executive compensation, payout policy, sovereign wealth fund"],"languages":["en"],"rights":["Copyright 2020 Sulaiman AlBader"],"rights_urls":[],"identifier_entries":[]},"links":{"outbound_url":"http://hdl.handle.net/2142/107865","outbound_label":"Handle","outbound_source":"dc:identifier"},"metadata_groups":[{"id":"people","label":"People","entries":[{"key":"dc:contributor","label":"Contributor","values":["Choi, Jaewon","Almeida, Heitor","Wu, Yufeng","Huang, Jiekun"]},{"key":"dc:creator","label":"Author","values":["AlBader, Sulaiman H"]}]},{"id":"academic_context","label":"Academic Context","entries":[{"key":"dc:date","label":"Dc Date","values":["2020-08-26T21:54:10Z","2020-04-09","2020-05"]},{"key":"dc:type","label":"Dc Type","values":["text","Thesis"]},{"key":"thesis:degree_discipline","label":"Discipline","values":["Finance"]},{"key":"thesis:degree_level","label":"Degree Level","values":["Dissertation"]},{"key":"thesis:degree_name","label":"Degree Name","values":["Ph.D."]},{"key":"thesis:institution_name","label":"Thesis Institution Name","values":["University of Illinois at Urbana-Champaign"]}]},{"id":"subjects_keywords","label":"Subjects and Keywords","entries":[{"key":"dc:subject","label":"Dc Subject","values":["executive compensation, payout policy, sovereign wealth fund"]}]},{"id":"language_rights","label":"Language and Rights","entries":[{"key":"dc:language","label":"Dc Language","values":["en"]},{"key":"dc:rights","label":"Dc Rights","values":["Copyright 2020 Sulaiman AlBader"]}]},{"id":"identifiers","label":"Identifiers","entries":[{"key":"dc:identifier","label":"Identifier","values":["http://hdl.handle.net/2142/107865"]}]},{"id":"additional","label":"Additional Metadata","entries":[{"key":"dc:description","label":"Description","values":["This dissertation contains two chapters: the first chapter examines the impact of sovereign wealth fund (SWF) ownership on firm executive compensation and the second examines the impact that various dividend payout policies have on stock prices. Below are the individual abstracts for each chapter. CHAPTER 1: Sovereign wealth funds are major players in the global markets. We contribute to the corporate governance literature by examining the possible value SWFs bring to their domestic holdings. We examine in particular the impact of SWF ownership on firm executive compensation. Using data on Kuwaiti SWFs, we find that having an SWF as an ultimate owner diminishes pay–performance sensitivity. This pay performance diminishment is greater, the higher the cash flow rights of the SWF. Moreover, having the SWF as an ultimate owner in a firm’s ownership chain does not alleviate the adverse effects of the divergence in cash-flow and control rights. This evidence supports the notion that SWFs impose agency costs on their targets. (JEL G15, G23, G32, G34, G38) CHAPTER 2: Previous research, specifically Larkin et al. (2017), has examined the relationship between dividend smoothing and stock prices, coming to a ‘puzzling’ conclusion that investors do not value firms that smooth their dividends over those that do. I revisit this question by considering the level of payout in an analysis of dividend smoothing. I use a modified version of the payout ratio and a novel way of categorizing low/high payout firms to produce two major findings. First, investors value firms that put an effort to payout more of their earnings higher than firms that do not; this payout price premium is present in all industries. Second, investors do value high-payout dividend-smoothing firms more than low-payout dividend smoothers. Finally, by taking the extreme portfolios on the payout and smoothness spectrum, I follow the performance of a portfolio of high-payout high-smoothing minus low-payout low-smoothing firms and find clear and significant negative performance of this portfolio, which depicts the price premium I am testing for. This performance is not explained by Fama-French 5 factor or Carhart momentum factor models. (JEL G32, G35).","Submission original under an indefinite embargo labeled 'Open Access'. The submission was exported from vireo on 2020-08-25 without embargo terms","The student, Sulaiman AlBader, accepted the attached license on 2020-03-27 at 15:19.","The student, Sulaiman AlBader, submitted this Dissertation for approval on 2020-04-01 at 04:58.","This Dissertation was approved for publication on 2020-04-09 at 13:08.","DSpace SAF Submission Ingestion Package generated from Vireo submission #14926 on 2020-08-25 at 17:06:14","Made available in DSpace on 2020-08-26T21:54:10Z (GMT). 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We contribute to the corporate governance literature by examining the possible value SWFs bring to their domestic holdings. We examine in particular the impact of SWF ownership on firm executive compensation. Using data on Kuwaiti SWFs, we find that having an SWF as an ultimate owner diminishes pay–performance sensitivity. This pay performance diminishment is greater, the higher the cash flow rights of the SWF. Moreover, having the SWF as an ultimate owner in a firm’s ownership chain does not alleviate the adverse effects of the divergence in cash-flow and control rights. This evidence supports the notion that SWFs impose agency costs on their targets. (JEL G15, G23, G32, G34, G38) CHAPTER 2: Previous research, specifically Larkin et al. (2017), has examined the relationship between dividend smoothing and stock prices, coming to a ‘puzzling’ conclusion that investors do not value firms that smooth their dividends over those that do. I revisit this question by considering the level of payout in an analysis of dividend smoothing. I use a modified version of the payout ratio and a novel way of categorizing low/high payout firms to produce two major findings. First, investors value firms that put an effort to payout more of their earnings higher than firms that do not; this payout price premium is present in all industries. Second, investors do value high-payout dividend-smoothing firms more than low-payout dividend smoothers. Finally, by taking the extreme portfolios on the payout and smoothness spectrum, I follow the performance of a portfolio of high-payout high-smoothing minus low-payout low-smoothing firms and find clear and significant negative performance of this portfolio, which depicts the price premium I am testing for. This performance is not explained by Fama-French 5 factor or Carhart momentum factor models. (JEL G32, G35).","Submission original under an indefinite embargo labeled 'Open Access'. The submission was exported from vireo on 2020-08-25 without embargo terms","The student, Sulaiman AlBader, accepted the attached license on 2020-03-27 at 15:19.","The student, Sulaiman AlBader, submitted this Dissertation for approval on 2020-04-01 at 04:58.","This Dissertation was approved for publication on 2020-04-09 at 13:08.","DSpace SAF Submission Ingestion Package generated from Vireo submission #14926 on 2020-08-25 at 17:06:14","Made available in DSpace on 2020-08-26T21:54:10Z (GMT). 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