# kaal:claim:2097160-021

**Claim.** The impending threat of dilution from a possible conversion of investor-held contingent convertible bonds can motivate existing shareholders to become actively involved in the governance of the entity.

**Type.** mechanism  **Support.** argued

**Holds when.**

- investors also hold contingent convertible bonds subject to a later trigger

**Source quote.**

> The impending threat of dilution for existing shareholders due to the possible conversion of the contingent convertible bonds held by investors may motivate existing shareholders to get actively involved in the governance of the entity.181

**From.** Wulf A. Kaal, *Contingent Capital in Executive Compensation* (2012), V.B.2 The Benefits of Early Triggers, page 44

**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

**Topics.** corporate-governance, compliance, governance-design, contingent-capital

**Keywords.** shareholder-monitoring, equity-dilution, corporate-governance, conversion

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