CEO options and payout decisions : an empirical analysis of the effects of CEO stock option on the payout decision
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- Master Thesis 
This thesis studies the effects of CEO stock options on the choice between dividends and share repurchases, by examining 165 companies listed on the Oslo Stock Exchange in the period from 2012 to 2016. Given the growth in importance and popularity of managerial stock options, we investigate how these stock options affect corporate payout policy. Specifically, we test whether CEO stock options lead reduce dividends and increase share repurchases. We rely on two different regression models in our research. Logistic regression models to estimate the likelihood of a dividend or repurchase payout, while random effects regression models to estimate how the CEOs stock options affect the size of each payout method. Our study presents two main findings; firstly, for the companies that pay dividends, our results indicate that for each percentage point increase in CEO stock options, companies lower the level of dividends by 0.095 percentage points. Secondly, our study does not find a significant relationship between CEO stock options and share repurchases. In order words, we fail to find that the presence of CEO stock options lead to increased share repurchases in Norway. To the best of our knowledge, this thesis provides unique insight to the companies listed on the Oslo Stock Exchange, as such studies have never been conducted on the Norwegian market before.