# Early trigger `kaal:entity:early-trigger` **Status.** derived This node is assembled mechanically from the 8 claims that carry the concept tag `early-trigger`. It is a roster of what the corpus says under this term. It is **not** an adjudicated definition: no single statement here has been ruled canonical, and no first-appearance call has been made. Read the claims and judge for yourself. ## Every claim under this term 8 claims across 1 works, 2012 to 2012. **2012** - [2097160-001](https://wulfkaal.github.io/claims/2097160-001) [design/argued] *(failure mode)* -- Early European initiatives to put contingent convertible bonds into executive pay lack governance-improving designs; contingent convertible bonds with an early conversion trigger should be used in executive compensation instead. > Early initiatives by European SIFIs to include contingent convertible bonds in executive compensation packages lack governance-improving designs. This Article suggests the use of contingent convertible bonds with an early conversion trigger in executive compensation. Wulf A. Kaal, Contingent Capital in Executive Compensation (2012). SSRN: https://ssrn.com/abstract=2097160 - [2097160-008](https://wulfkaal.github.io/claims/2097160-008) [design/argued] -- Adding contingent convertible bonds with an early trigger to executive compensation packages creates a corporate governance mechanism that addresses the inability of contractual control rights to constrain executive opportunism. > Adding contingent convertible bonds with an early trigger to executive compensation packages can create a corporate governance mechanism that helps address these shortcomings.128 Wulf A. Kaal, Contingent Capital in Executive Compensation (2012). SSRN: https://ssrn.com/abstract=2097160 - [2097160-013](https://wulfkaal.github.io/claims/2097160-013) [definitional/argued] -- The early trigger converts only the executives' portion of debt into equity, ahead of investors' contingent convertible bonds and while the entity is still sound on a micro-prudential basis, which is what makes it an early warning system rather than a recapitalization device. > The early trigger converts only the portion of executives' debt to equity, before investors' contingent convertible bonds are converted, when the entity is still sound on a micro-prudential basis. Wulf A. Kaal, Contingent Capital in Executive Compensation (2012). SSRN: https://ssrn.com/abstract=2097160 - [2097160-018](https://wulfkaal.github.io/claims/2097160-018) [condition/argued] -- To be effective, early triggers must be set well above the Basel III capital requirement threshold, and capital-ratio early triggers should be independent of regulatory demands about capitalization levels. > To be effective, early triggers should be well above the threshold for capital requirements under Basel III.164 But early triggers in the form of capital ratios should be independent of regulatory demands pertaining to capitalization levels. Wulf A. Kaal, Contingent Capital in Executive Compensation (2012). SSRN: https://ssrn.com/abstract=2097160 - [2097160-019](https://wulfkaal.github.io/claims/2097160-019) [mechanism/argued] -- Because conversion damages both the debt portion and the surviving equity portion of an executive's package at the moment equity matters most for total pay, the combined effect is a strong incentive for executives to lower risk in order to avoid the triggering event. > convertible bonds portion is converted and when equity is increasingly important to maintain the overall value of executive compensation.174 The combined effect could be a strong incentive for executives to take lower risks in order to avoid the triggering event.175 Wulf A. Kaal, Contingent Capital in Executive Compensation (2012). SSRN: https://ssrn.com/abstract=2097160 - [2097160-022](https://wulfkaal.github.io/claims/2097160-022) [mechanism/argued] -- Early triggers in executive compensation improve the signaling of default risk by producing the signal while default risk is present but still somewhat remote. > Early triggers for contingent convertible bonds in executive compensation packages may increase and optimize the signaling of default risk at a time when the risk of default is present but still somewhat remote. Wulf A. Kaal, Contingent Capital in Executive Compensation (2012). SSRN: https://ssrn.com/abstract=2097160 - [2097160-034](https://wulfkaal.github.io/claims/2097160-034) [mechanism/argued] -- 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. > 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 Wulf A. Kaal, Contingent Capital in Executive Compensation (2012). SSRN: https://ssrn.com/abstract=2097160 - [2097160-040](https://wulfkaal.github.io/claims/2097160-040) [design/argued] -- An early trigger design for contingent convertible bonds in executive compensation enables earlier signaling of default risk, increases incentives for creditors and shareholders to monitor, and increases executives' incentives to lower risk-taking. > Contingent convertible bonds with an early trigger design enable earlier signaling of default risk; they provide increased incentives for monitoring by creditors and shareholders as well as incentives for executives to lower their risk-taking.282 Wulf A. Kaal, Contingent Capital in Executive Compensation (2012). SSRN: https://ssrn.com/abstract=2097160 ## Verify Every claim above resolves to a record carrying a verbatim source quote, the sha256 of the source PDF, and a preformatted citation. Nothing here asks to be taken on trust. curl -s https://wulfkaal.github.io/entities/early-trigger.md | sha256sum **Canonical form.** This markdown file is the canonical hashed representation of this entity node. Its sha256 is the content hash.