kaal:claim:2097160-034

Unlike the liquidation value backing traditional inside debt, equity received by executives on early conversion can still appreciate, because the early trigger creates a substantial buffer before insolvency.

Source quote, verbatim
Unlike the liquidation value of traditional inside debt, the equity in executives' portfolios after the conversion of the contingent convertible bonds can still be increased because the early trigger creates a substantial buffer before insolvency.222
From

Wulf A. Kaal, Contingent Capital in Executive Compensation (2012), VI.A Contingent Capital as Inside Debt, p. 56
https://ssrn.com/abstract=2097160 · source PDF

Cite as

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

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Classification

mechanismsupport: arguedcontingent-capitalrisk-and-incentives

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