배당 관련 적극적 주주권 행사가 경영자의 이익조정에 미치는 영향

This paper investigates the impact of shareholder activities regarding dividend policy on manager’s earnings management behavior. First, using a sample of Korean firms that are targeted by dividend-related “vote no” activities and shareholder engagement, we find that shareholder activities are negatively associated with real earnings management. In addition, if low-dividend targeted firms try to increase the level of payout, manager’s incentive to manage earnings upward is lower. Second, we analyze that the relationship between dividend-related shareholder activities and real earnings management depends on targeted firms’ financial status. The evidence shows that when firms with higher free cash flow, the negative effect of dividend -related shareholder activities on earnings management is more pronounced. However, for firms with the lack of capacity to pay dividends, the dividend pressures motivate earnings management to avoid dividend cuts. Third, we also find that dividend-related shareholder activities incrementally decrease earnings management for targeted firms with strong corporate governance. Lastly, this study is conducted using the unique data set of proxy voting decisions by domestic institutional investors, including three major pension funds and all private institutional investors. Overall, our findings contribute to shareholder activism literature by examining the effect of various type of shareholder activities for the first time in Korea.