Experience

Increasing evidence suggests the personal traits of chief executive officers (CEOs) can influence corporate policies. We examine how one dimension, past professional experiences, can affect corporate payout policy. Exploiting exogenous CEO turnovers and future employment, we hypothesize that CEOs experiencing a distress event in their past career alter the corporate payout policy at their subsequent firm of employment. We discover that CEOs having experienced prior professional career distress are less likely to pay dividends and use repurchases and pay out lower levels for each type of payout. Additionally, when CEOs with distress do have a payout policy greater than zero dollars, there exists a preference toward the use of repurchases in the payout policy, adding to the literature of substitution and differences between the two forms of payout. We find that dividend smoothing is reduced by CEOs that have past professional distress.

Terror Management Theory posits that induced death-related cognitions lead to anxiety. To relieve anxiety, individuals may bolster their self-esteem or current cultural worldviews. The current study hypothesizes that induced thoughts of social connectedness will be an anxiety-buffering mechanism that will reduce the need to defend one's worldview. Participants watched one of two films which were intended to either induce social connectedness or have no effect on the individual. Each participant watched a short film clip then completed measures pertaining to moral transgressions, affiliative and agentic extraversion, self-esteem, and positive and negative affect. Females who were high on affiliation were found to defend their worldviews more often than males high on affiliation following the social connectedness induction. The experimental (42-Up) condition showed lower levels of punitiveness than the control (K-Web) condition.