CEO narcissism and dividend policy

Abstract

This study examines the effect of CEO narcissism on dividend policies. The results indicate that firms with highly narcissistic CEOs pay higher dividends. Additional analyses using cash flow and CEO pay slice reveal that this tendency is less likely to be driven by signaling motivation. However, using tangibility and bid-ask spread, we observe that this tendency is to mitigate agency conflicts by disciplining managerial opportunism and incentivizing CEOs to prioritize shareholders' interests. This study contributes to literature by linking a firm's major strategy to its CEO characteristics.