The Influence Of Management Shareholding To Dividend Policy

Based on the dividend policy of listed companies, this paper in which we apply principal agent theory, residual control theory, agency cost theory, signaling theory and catering theory explores the influence of management shareholding to dividend policy from the angle of improving the level of corporate governance. From this paper, we expect to provide some basis so as to formulate reasonable management incentives policy and dividend policy, improve governance structure, improve enterprise value and provide certain reference for the investors.Since CSRC(China Securities Regulatory Commission) make mandatory provisions to cash bonus in 2008, the enthusiasm of distributing dividends during listed companies in China has boosted which causes dividend policy a wide public concern over the whole society. Under this background, this article using data from stock markets of Shanghai and Shenzhen during the year of 2009 to 2013 as samples empirically tests the relationship between whether the management shares stocks, the proportion of management shareholding and cash dividend as well as the stock dividend after eliminating abnormal data, in addition, we further explore the connection of the proportion of management shareholding and cash dividend going with stock dividend. Study founds:(1)In the companies existing management shareholding, they will issue more cash dividend. With the increase of management shareholding, payment level of cash dividend is also rising, so that management shareholding can promote the distribution of cash dividend.(2)In the companies existing management shareholding, they will issue more stock dividend. With the increase of management shareholding, the issuing degree of stock dividends will also increase.(3)To the relationship between the management shareholding and cash dividend, corporate governance has a promoting effect. During the companies with high level of corporate governance, the increase of management shareholding will promote the issuing of cash dividend.(4)To the relationship between the management shareholding and stock dividend, corporate governance also has a promoting effect. During the companies with high level of corporate governance, the increase of management shareholding will promote the issuing of stock dividend. This study which is based on the actual Chinese situation explores the relationship between management shareholding and cash dividend as well as stock dividend on the foundation of our quality of corporate governance in China.