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119049
11 Pokrovskiy boulevard, room S629
Phone:
+7 (495) 772-95-90*27447, *27947, *27190
+7 (495) 916-88-08 (Master’s Programme Corporate Finance)
- Email: df@hse.ru
Head of Corporate Finance Research Center, Dr., tenured professor
The HSE School of Finance is the leading Russian competence center in the field of corporate finance, business valuation, banking, stock market, risk management and insurance, accounting and audit.
HSE is the first Russian university in the global ranking "QS - World University Rankings by subject", 2022 in the subject area of Accounting and Finance. Moreover, the university is the 1-st in the rating "THE World University Rankings by subject" in the subject area of Business & Management Studies, 2022
Grishunin S., Ivashkovskaya I., Brendeleva N. et al.
Journal of Corporate Finance Research. 2025. Vol. 19. No. 1. P. 25-40.
Badr I., Rawnaa Ibrahim, Hussainey K.
In bk.: Opportunities and Risks in AI for Business Development. Vol. 2: 546. Bk. Opportunities and Risks in AI for Business Development. Prt. 636. Springer, 2025. P. 385-399.
Financial Economics. WP HSE. HSE University, 2025. No. 1/FE/2025.
A Paper Written in Cooperation by Irina Ivashkovskaya, Professor of the School of Finance, and Artem Anilov, Associate Professor of the School of Finance, is published in the Journal of Economics and Business
In the research the authors studied a sample of 813 US companies for 2007-2019. They set out a goal to examine how the incentives offered by the boards of directors through CEO inside debt and its two components influence the probability and amount of cash dividends and share repurchases as well as the decisions on payout channels.
The authors showed that higher CEO’s ownership of debt-like components of managerial compensation known as inside debt is related to an increased likelihood and level of share repurchases. This decision motivates CEOs to choose share repurchases as the main channel for payout policy. Besides, the authors indicated that board of directors use different components of inside debt to provide various incentives from the point of view of payout decisions. Deferred compensation motivates repurchases while pension benefits encourage cash dividends. The authors assert that several special arrangements included in deferred compensation move this type of compensation closer to equity-based compensation while most effects expected from inside debt come from pension benefits.
Based on the conclusions drawn the authors recommend the boards of directors to consider making heavier use of internal debt as a tool for shaping CEO’s payment decisions taking into consideration its effectiveness in aligning CEO’s interests with those of shareholders and debtholders.
Future avenues of research in this field may be dedicated to a more detailed study of the interaction between CEO’s behavioral traits (such as optimism, education, and management style) and compensation incentives for various strategic financial decisions. Besides, examining the interactions between CEO’s and board members’ behavioral biases may provide understanding of corporate compensation policies. The incentives of the chief financial officer (CFO) who influences significantly financial decisions along with the CEO may also be interesting for research.
Congratulations to our colleagues on the publication in a reputable source. We wish them further productive scholarly endeavors!
Read the full text at https://www.sciencedirect.com/science/article/abs/pii/S014861952500027X