Executive Compensation and Corporate Debt Policy and Monitoring
- https://doi.org/10.2991/aebmr.k.200908.013How to use a DOI?
- executive compensation, leverage, risk taking behavior
Both debtor monitoring and corporate risk-taking are very interested to researchers, but how does these two come together and interplay in terms of executive compensation contract structuring? This paper intends to shed light on this question in the following dimensions. First, we have documented that firms with high leverage (Risk) grant executives with low Vega sensitivity, because bondholder have disincentive to taking risk beyond necessary, and the respective firms are likely to put constrains on executive risk-taking behavior through compensation contract. Furthermore, the results show that such effective monitoring could be accomplished by greater usage of short-term lending and hence requiring firm to roll-over the debt period by period. Lastly, this result is robust weakly to all top five executives, and robust strongly throughout the accounting standard transition period.
- © 2020, the Authors. Published by Atlantis Press.
- Open Access
- This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).
Cite this article
TY - CONF AU - Dongxu Yang AU - Tian Tan AU - Shizhong Xiong PY - 2020 DA - 2020/09/08 TI - Executive Compensation and Corporate Debt Policy and Monitoring BT - Proceedings of the 3rd International Conference on Economy, Management and Entrepreneurship (ICOEME 2020) PB - Atlantis Press SP - 79 EP - 84 SN - 2352-5428 UR - https://doi.org/10.2991/aebmr.k.200908.013 DO - https://doi.org/10.2991/aebmr.k.200908.013 ID - Yang2020 ER -