# kaal:claim:5583610-037

**Claim.** 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.

**Type.** failure  **Support.** evidenced

**Holds when.**

- reward emissions large enough to attract yield seekers

**Source quote.**

> 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.

**From.** Wulf A. Kaal, *Liquid Equity Rewards in Corporate America* (2025), 9.1. Costs and Risks, page 33

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

**Verify.** sha256 of source PDF `2d73609d95ddb1573acc2a9e7af617fbe6283d6e591deb6317f6d5d804517c62` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20-%202025%20-%20Liquid%20Equity%20Rewards%20in%20Corporate%20America.pdf

**Failure mode.** mercenary shareholder capture  (family: short-termism)

**Topics.** corporate-governance

**Keywords.** mercenary-shareholders, airdrop-failure, value-dilution, volatility

**Canonical form.** This markdown file is the canonical hashed representation of the claim. Its sha256 is the content hash used for attestation.