Show me the money-cut: Shareholder dividend suspensions and voluntary CEO pay cuts during the COVID pandemic

Denis L. Alves, Miles B. Gietzmann*, Bjorn Jorgensen

*Corresponding author for this work

Research output: Contribution to journalArticleScientificpeer-review

7 Citations (Scopus)


Many US companies with December 31, 2019 as their fiscal year end had their Annual Shareholder Meeting scheduled (usually online) during the COVID pandemic. Unexpectedly faced with significant changes in operating environments, some companies decided to suspend shareholder dividend payments. In normal circumstances, this would be interpreted as a very negative event and shareholders could be expected to respond adversely at the annual meeting. However, we investigate whether CEOs were able to maintain shareholder support by offering a previously unheard of response of “sharing the pain”, committing to cut their own pay following a dividend suspension. At issue is whether investors acted as if they updated their inferences using the new voluntary pay-cut decision to infer the extent to which the CEOs underlying personality type was well matched to crisis management. We estimate an instrumental variables model in which the dividend suspension is used as an instrument for the endogenous pay cut variable.
Original languageEnglish
Article number106898
Peer-reviewed scientific journalJournal of Accounting and Public Policy
Issue number6
Number of pages10
Publication statusPublished - 15.09.2021
MoE publication typeA1 Journal article - refereed


  • 512 Business and Management
  • Covid-19
  • Say-on-pay
  • Dividends suspension
  • Executive pay-cut

Areas of Strength and Areas of High Potential (AoS and AoHP)

  • AoS: Financial management, accounting, and governance


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