kaal:claim:1998455-032

A contingent capital design that increases voting rights on conversion allows systemically important institutions to lower risk taking implicitly and to achieve an indirect, institution specific form of corporate governance reform through increased checks and balances.

With a design that increases voting rights, SI- FIs could implicitly lower risk-taking and allow for a form of in- direct and institution- specific corporate governance reform, i.e., increased checks and balances.

Wulf A. Kaal, Initial Reflections on the Possible Application of Contingent Capital in Corporate Governance (2012), VII.C. Increased Voting Rights, p. 46
https://ssrn.com/abstract=1998455 · source PDF

Wulf A. Kaal, Initial Reflections on the Possible Application of Contingent Capital in Corporate Governance (2012). SSRN: https://ssrn.com/abstract=1998455

• where CCS are issued with a voting rights increase upon conversion
• issuance may be voluntary or mandatory

designsupport: arguedgovernance-designcontingent-capitalcorporate-governancerisk-and-incentives

• generalizes kaal:claim:2097160-011 A contingent capital award to executives without a conversion feature yields only limited governance improveme...
• extends kaal:claim:1908473-006 The second trigger, which increases voting rights before resolution, should fire on evidence that conversion i...
• extends kaal:claim:1908473-029 Information asymmetries between market participants and a systemically important institution's management befo...
• extended_by kaal:claim:2097160-040 An early trigger design for contingent convertible bonds in executive compensation enables earlier signaling o...

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