Bayat, A., Goergen, M., Koutroumpis, P. et al. (1 more author) (2025) The impact of CEO political ideology on labor cost reductions and payout decisions during the COVID-19 pandemic. Journal of Corporate Finance, 90. 102692. ISSN 0929-1199
Abstract
Using a hand-collected dataset, we study whether CEO political ideology affected S&P 500 firms’ reactions to the COVID-19 pandemic in 2020. During the pandemic, CEOs had the option to distribute the pain of the pandemic’s impact onto shareholders by paying lower dividends, onto the workforce by reducing labor costs, or to share the pain. We hypothesize that conservative CEOs were more likely to aggressively reduce labor costs while still meeting dividend expectations. Conversely, other CEOs would have been less likely to meet dividend expectations and less likely to reduce labor costs. Our findings support this hypothesis. We also find that during the pandemic, conservative CEOs used temporary downsizing to avoid earnings losses, enabling them to meet dividend expectations.
Metadata
Item Type: | Article |
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | This is an author produced version of an article published in Journal of Corporate Finance, made available under the terms of the Creative Commons Attribution License (CC-BY), which permits unrestricted use, distribution and reproduction in any medium, provided the original work is properly cited. |
Keywords: | CEO political ideology; Dividend policy; Downsizing; Labor cost reductions; Stakeholder management; COVID-19 pandemic |
Dates: |
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Institution: | The University of Leeds |
Academic Units: | The University of Leeds > Faculty of Business (Leeds) > Analytics, Technology & Ops Department |
Depositing User: | Symplectic Publications |
Date Deposited: | 29 Oct 2024 14:35 |
Last Modified: | 27 Nov 2024 17:14 |
Status: | Published |
Publisher: | Elsevier |
Identification Number: | 10.1016/j.jcorpfin.2024.102692 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:218952 |