kaal:claim:5583610-037

LER can backfire by attracting short-term mercenary shareholders who chase the reward rather than hold, eroding the loyalty benefit and increasing volatility, with studies pointing to as much as seventy percent value dilution after reward emissions.

Economic drawbacks include the potential for attracting short-term "mercenary" shareholders, which could erode loyalty benefits and heighten volatility, with studies suggesting up to 70% value dilution post-reward emissions.

Wulf A. Kaal, Liquid Equity Rewards in Corporate America (2025), 9.1. Costs and Risks, p. 33
https://ssrn.com/abstract=5583610 · source PDF

Wulf A. Kaal, Liquid Equity Rewards in Corporate America (2025). SSRN: https://ssrn.com/abstract=5583610

• reward emissions large enough to attract yield seekers

failuresupport: evidencedfailure: mercenary shareholder capturefamily: short-termismcorporate-governance

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