Research On Managerial Power,Opportunism Behavior And Cash Dividend

In the early years of reform and opening up,as our government delegated control powers and benefits to the state-owned enterprises,there existed owner absence and insider control in the corporate governance.Managerial power formed and developed at that background.In November 2013,The 3rd Plenary Session of the 18th Central Committee focused on mixed ownership reform again and encouraged insider stockholding.The problems of managerial power are increasingly prominent in our listed companies and the corporate governance is facing great challenges.The profit sharing plans should be formulated by board of directors and approved by shareholders’ meeting.However,the managements become the actual deciders at that special background.CSRC has announced several policies to encourage companies to distribute cash dividends so as to improve the awareness of investor returns.The problems of managerial power and cash dividends distribution draws much attention of the society.This paper selects ZH company whose managerial power is great as a main research object.First,analyze the influence mechanism of managerial power,opportunism behavior and cash dividend based on Managerial Power Theory,Agency Cost Theory of Dividend,Free Cash Flow Hypothesis and the Model of Sustainable Payout Rate.Then,research the overall industry using the data of 120 real estate A-share listed companies in Shanghai and Shenzhen Stock Exchange from year 2011 to 2015.Further more,focus on ZH company to explore the influence of managerial power on cash dividends distribution and the role of opportunism behavior in this relationship.This paper uses the research methods combined of theoretical study and case study.It finds that the cash dividends decrease with increasing managerial power for the sake of opportunism behavior,such as perquisite consumption.The cash dividends distribution didn’t give consideration to both the cost of equity capital and the sustainable growth rate.And the market reactions are negative.Based on above of all,this paper proposes that ZH company and its industry should perfect corporate inside governance mechanism,external market restriction mechanism and cash dividend policy.