kaal:claim:1908473-018

The threat of loss on conversion and the implicit dilution of existing stock holdings reduce shareholders' incentive to press management for higher risk in pursuit of higher returns.

The threat of loss due to conversion of CCS and the implicit dilution of stock holdings could reduce incentives for shareholders to encourage management to take higher risks for higher returns.

Wulf A. Kaal, Christoph Henkel, Contingent Capital with Sequential Triggers (2011), II.A. Potential for Reform and Financial Stability, p. 17
https://ssrn.com/abstract=1908473 · source PDF

Wulf A. Kaal, Christoph Henkel, Contingent Capital with Sequential Triggers (2011). SSRN: https://ssrn.com/abstract=1908473

mechanismsupport: arguedrisk-and-incentivescorporate-governancecontingent-capital

• restated_by kaal:claim:2061166-022 Because conversion carries a threat of loss and implicit dilution of stock holdings, contingent capital reduce...
• restated_by kaal:claim:1998455-010 The threat of dilution of stock holdings, combined with the threat of loss on conversion, reduces the pressure...
• restated_by kaal:claim:2957645-022 The threat of dilution of stock holdings, combined with the threat of loss upon conversion, could help reduce ...

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