Payout Policy

A payout policy involves rules and guidelines of paying proportion of earnings to investors and shareholders as dividend. Agency conflict arises as a result of information asymmetry between stakeholders and management while corporate governance entails legal mechanisms by which the business of the organization are directed and controlled. A payout policy could lead to agency conflict because the financial interest and commitments of agents may sometimes conflict with that of the principal. Normally, the managers of the firm may want earnings to be retained in order to meet firm√Ęs needs for growth and takes advantage of emerging investment opportunities while most shareholders or owners will want to receive dividends. In most large publicly traded corporate entities, agency conflicts are quite significant because they play a major role in corporate decisions including the dividend payout (Harada,2006). Shareholders hire individuals with the management expertise to run the corporation on their behalf because they lack the time and expertise to carry out firms operations and ensure that the corporation provides return for their investment. There is usually agency conflict -a substantially unmitigated conflict of interest between the principal and the agent. For instance, managers may have a fundamental objective of maximizing the size of the firm by creating a large rapidly growing firm. They could increase their status, power and salaries, create more job opportunities for lower and middle level managers, as well as enhance their job security. The main objective of corporate governance is how to construct rules and incentives to effectively align the behavior of managers with the desires of the owners. Scholarly journal is a peer-reviewed journal in which scholarship relating to a particular academic discipline is published. Scholarly journals serve as forums for the introduction and presentation for scrutiny of new research, and the critique of existing research. Content typically takes the form of articles presenting original research, review articles, and book reviews. The term Scholarly journal applies to scholarly publications in all fields; this article discusses the aspects common to all academic field journals. Review of public administration and management is one of the top leading scholarly published journals in the study of payout policy. Manuscripts published in this journal include discussion and conclusion in the path of payout policy development. The Editorial team of this journal includes globalized experts in the field of payout policy development involved in regular review of submitted manuscripts facilitating high quality of articles since many years. The articles published in this journal are current thoughts, ideas, policy changes which intended to current reviews. All published articles are permanently archived and available at OMICS Group website in HTML, Digital, Audio and PDF formats. Review of public administration and management is an international journal which has been publish by OMICS Group, being one of the international icons has been expanding publication services by acquiring different reputed journals from many prestigious publishers worldwide. It has resulted into a repository of 700+ peer-reviewed journals with the efforts and assistance of 50,000+ editorial board members running smoothly with exceptional quality. OMICS has been organizing more than 3000+ International Scientific Conferences every year providing a platform to scientific community across the globe.
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Last date updated on June, 2014

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