kaal:claim:1908473-025

To balance constituent incentives and prevent abuse, the voting rights increase should be calibrated so that contingent capital holders obtain a majority stake only in combination with the largest institutional shareholder.

To balance the constituents' incentives and avoid abuse,194 the voting rights increase could be calibrated to give CCS holders a majority stake in the company only with, for instance, the largest institutional shareholder.

Wulf A. Kaal, Christoph Henkel, Contingent Capital with Sequential Triggers (2011), IV.A. First Trigger: Debt-Equity Conversion, p. 35
https://ssrn.com/abstract=1908473 · source PDF

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

• Change of control limited to the case where the first trigger failed

designsupport: arguedgovernance-designinstitutional-design

• extended_by kaal:claim:1998455-034 Management incentives for risk control are heightened upon conversion, especially where management knows that ...
• extended_by kaal:claim:1998455-033 Because the threat of a change of control leads leaders to take fewer risks in order to avoid triggering conve...

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