kaal:claim:2097160-019

Because conversion damages both the debt portion and the surviving equity portion of an executive's package at the moment equity matters most for total pay, the combined effect is a strong incentive for executives to lower risk in order to avoid the triggering event.

convertible bonds portion is converted and when equity is increasingly important to maintain the overall value of executive compensation.174 The combined effect could be a strong incentive for executives to take lower risks in order to avoid the triggering event.175

Wulf A. Kaal, Contingent Capital in Executive Compensation (2012), V.B.2 The Benefits of Early Triggers, p. 42
https://ssrn.com/abstract=2097160 · source PDF

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

• executive package combines contingent convertible bonds with equity-based compensation

mechanismsupport: arguedrisk-and-incentivesai-and-agentscontingent-capital

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