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Dividend policy of Exxon Mobil


There is long-term financial problems the company a negative signal,[link widoczny dla zalogowanych], such action will cause the stock price fell. Figure 3 shows the 1994 to 2004 Brent crude oil spot price movements. Compare Figure 3 and Figure 1, XOM trends and changes in net movements in crude oil prices are basically the same, indicating that oil prices on oil company profits are significant. Moreover, XOM net change in amplitude (standard deviation of 47.7%) than the volatility of oil prices (27.5%), indicating that the net flJf ~ sensitive to changes in oil prices. In recent decades, the international oil market changes, ups and downs of oil prices, oil prices in 1998 fell nearly 12 U.S. dollars / barrel, oil prices in 2004 reached almost 40 dollars / barrel. In 2005 crude oil price is climbing. Fluctuations in oil prices led to instability in oil company profits. It is this uncertainty of future profits,[link widoczny dla zalogowanych], making the oil companies in terms of cash dividends per share adjusted cautious. Oil prices or even losses in the year,[link widoczny dla zalogowanych], the company generally will not easily cut dividend to avoid a negative signal to the market delivery; and when soaring oil prices, if the company greatly improved under the current situation of the cash dividend per share, once the oil prices, the company may not be able to maintain at a high level of dividend payments, the result must be cut dividends, leading to price decline. So as to maintain the company's dividend policy is more rigid, temporary fluctuations in the profit per share dividend will not lead to significant changes. Only when the company had 4540 children in the future 252015l0 /,. / A 'J_-, J,,, 19941995199619971998199920002001200220032004 raw spot price of Brent crude in Figure 3 the full confidence, will be the dividend to a new level. (5) agency cost theory of agency cost theory that the formation of the company shareholders and the management agency relationship, due to inconsistencies between the two objectives, the management may try to achieve their goals at the expense of shareholder value, which will generate agency costs , and the payment of dividends can reduce agency costs. Reduced because of the cash paid to shareholders of the company's control over the management of free cash flow,[link widoczny dla zalogowanych], loss of self-interest can be used to seek funding sources, thereby reducing agency costs, and help increase corporate value. Table 4 shows that XOM is extremely dispersed ownership structure, insider ownership of less than 1%. With the company's management has reduced the proportion of company stock, the management requirements of the company's residual claim a corresponding reduction, which makes management through the And the more dispersed shareholding structure, business conduct effective supervision of management, the less the number of shareholders, information asymmetry is more serious, which makes the company between the shareholders and managers increases agency costs and therefore require the company to pay dividends to shareholders transmission companies and managers conduct the higher level of information. XOM is also a large number of cash flow paid to shareholders one of the reasons. Table 4XOM ownership structure within one of the greatest total number of shares the top ten institutional investors, institutional investors, institutional shareholders (million shares) shareholding shareholding shareholding percentage of investors holding more than 51.40% 4.0% 565.100.71 18.30% 0% Note: Data as of the end of June 2004 In short, XOM cash dividends over a decade has remained stable and growing trend, although the interpretation of dividend policy is very complex, but one thing is certain, the company focus its own the image in the minds of investors, try to avoid passing negative signal to the market, regardless of financial status, are trying to create a stable growth of the company's image. China's three major oil companies (CNPC, Sinopec and CNOOC) in 2000 and 2001 have been listed overseas, marking the largest oil companies fully into the international capital markets. China's oil companies in the formulation of dividend policy, the urgent need for scientific, systematic and practical guidance of theory and practical experience to do. Learn from foreign experience in the big oil companies dividend policy, combined with the actual Chinese companies to develop a reasonable dividend policy,[link widoczny dla zalogowanych], will help companies achieve the goal of maximizing value.