One Way To Incent A Company To Raise Its Dividend

Arguments for dividend growth typically emphasize 1) strong balance sheets and 2) track records of dividend growth. However, no other report we've read points to this fascinating nugget that Parker unearthed: executive compensation trends. In short, it has become increasingly in the best interests of executives to boost dividend payouts thanks to the evolution of equity-based compensation.

From Parker: "It is important that fundamental analysts understand how the senior management teams of the companies they are analyzing are variably compensated, as those with restricted stock and not options are much more likely to increase dividends. The principle? People rarely intentionally damage their own net worth."

Source: Business Insider

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