# kaal:claim:2097160-030

**Claim.** If executives influence the drafting of their own trigger, opportunism within the bounds of fiduciary duty will produce suboptimal early triggers and increase the potential for abuse, because executives can use the trigger to obtain cheap stock during a crisis.

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

**Holds when.**

- executives involved in the executive compensation and trigger design process

**Source quote.**

> Executives' opportunism and involvement in drafting the trigger could result in suboptimal early triggers in contingent convertible bonds issued to executives. If the trigger design allows executives to influence the early trigger, the suboptimal early trigger could increase the potential for abuse

**From.** Wulf A. Kaal, *Contingent Capital in Executive Compensation* (2012), V.C Design Features to Avoid Abuse, page 51

**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.** Management capture of trigger design  (family: trigger-design-failure)

**Topics.** contingent-capital

**Keywords.** management-opportunism, trigger-design, abuse, conflict-of-interest

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