# kaal:claim:1908473-018

**Claim.** 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.

**Type.** mechanism  **Support.** argued

**Source quote.**

> 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.

**From.** Wulf A. Kaal, Christoph Henkel, *Contingent Capital with Sequential Triggers* (2011), II.A. Potential for Reform and Financial Stability, page 17

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

**Verify.** sha256 of source PDF `9d578dac663357529edd1f6453fcfe69bdc59ac882408d9edfde5a4c2916befa` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20and%20Henkel%20-%202011%20-%20Contingent%20Capital%20with%20Sequential%20Triggers.pdf

**Topics.** risk-and-incentives, corporate-governance, contingent-capital

**Keywords.** dilution, risk-taking, shareholder-incentives, contingent-capital

**Related claims.**

- restated_by: https://wulfkaal.github.io/claims/2061166-022
- restated_by: https://wulfkaal.github.io/claims/1998455-010
- restated_by: https://wulfkaal.github.io/claims/2957645-022

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