kaal:claim:2097160-012

Contingent convertible bonds issued to executives are typically too small in volume to dilute investors' equity holdings or to supply a meaningful equity infusion during a crisis, so copying investor CoCo designs for executive pay produces suboptimal outcomes.

contingent convertible bonds may be issued to executives in volumes that may not suffice to dilute investors' equity holdings. The lower volume of contingent convertible bonds issued to executives may not provide a sufficiently strong equity infusion during a crisis.

Wulf A. Kaal, Contingent Capital in Executive Compensation (2012), V.B Design of Contingent Convertible Bonds in Executive Compensation, p. 34
https://ssrn.com/abstract=2097160 · source PDF

Wulf A. Kaal, Contingent Capital in Executive Compensation (2012). SSRN: https://ssrn.com/abstract=2097160

• contingent convertible bonds issued only to executives
• volumes smaller than investor issuances

failuresupport: arguedfailure: Insufficient volume for dilution or recapitalizationfamily: agency-cost-and-managerial-opportunismcontingent-capital

• specializes kaal:claim:1908473-009 The volume of contingent capital issuance should be large enough that conversion produces sufficient dilution,...

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