# kaal:claim:2097160-012

**Claim.** 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.

**Type.** failure  **Support.** argued

**Holds when.**

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

**Source quote.**

> 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.

**From.** Wulf A. Kaal, *Contingent Capital in Executive Compensation* (2012), V.B Design of Contingent Convertible Bonds in Executive Compensation, page 34

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

**Verify.** sha256 of source PDF `1e1f8aa246bce19f4658dbceb455c7c2a272aa5d63a9e9bdaa46a3a5a87680fc` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20-%202012%20-%20Contingent%20Capital%20in%20Executive%20Compensation.pdf

**Failure mode.** Insufficient volume for dilution or recapitalization  (family: agency-cost-and-managerial-opportunism)

**Topics.** contingent-capital

**Keywords.** issuance-volume, equity-dilution, design-adjustment, contingent-capital

**Related claims.**

- specializes: https://wulfkaal.github.io/claims/1908473-009

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