CEO Compensation and Covenant Violations

2011 ◽  
Author(s):  
Bill B. Francis ◽  
Iftekhar Hasan ◽  
Xian Sun
Keyword(s):  
Ceo Compensation ◽  
Covenant Violations

Creditor Influence and CEO Compensation: Evidence from Debt Covenant Violations

2018 ◽  
Vol 93 (5) ◽  
pp. 23-50 ◽  
Author(s):  
Steven Balsam ◽  
Yuqi Gu ◽  
Connie X. Mao
Keyword(s):  
Risk Taking ◽  
Ceo Compensation ◽  
Regression Discontinuity ◽  
Firm Dynamics ◽  
Debt Covenants ◽  
Compensation Package ◽  
Debt Covenant ◽  
Debt Covenant Violation ◽  
The Right ◽  
Covenant Violations

ABSTRACT Debt covenant violation alters firm dynamics, providing creditors with the right to demand repayment, and via that right, influence firm actions. We provide evidence consistent with creditors employing that channel to influence CEO compensation. Using regression discontinuity analysis, we show that in the year after a covenant violation, after controlling for other factors, CEO compensation is 8.5 percent lower and the CEO's compensation package contains fewer risk-taking incentives, as the vega associated with newly granted options is 26 percent lower. These changes are more pronounced when the creditor has greater influence, such as when the borrower and creditor have a prior lending relationship, the creditor is a highly reputable bank, or when the borrower is financially weaker. We also find that CEOs' risk-taking incentives decrease with the number of debt covenants; in particular, the number of performance debt covenants being breached. JEL Classifications: G21; G34.

CEO Compensation and Acquired and Acquiring Companies in Large Corporate Acquisitions

GIS Business ◽  
2016 ◽  
Vol 11 (5) ◽  
pp. 01-13
Author(s):  
Simon Yang
Keyword(s):  
Firm Performance ◽  
Executive Compensation ◽  
Ceo Compensation ◽  
Relative Sensitivity ◽  
Matched Sample ◽  
Executive Pay ◽  
Corporate Acquisitions ◽  
Acquiring Firms ◽  
Managerial Power ◽  
To Receive

This paper examines the relative sensitivity of CEO compensation of both acquiring and acquired firms in the top 30 U.S. largest corporate acquisitions in each year for the period of 2003 to 2012. We find that total compensation and bonus granted to executive compensation for acquired companies, not acquiring companies, are significantly related to the amount of acquisition deal even after the size and firm performance are controlled for. Both acquiring and acquired CEOs are found to make the significantly higher compensation than the matched sample firms in the same industry and calendar year. We also find that executives with higher managerial power, as measured by a lower salary-based compensation mix, prior to a corporate acquisition are more likely to receive a higher executive pay in the year of acquisition. The association between executive compensation and managerial power seems to be stronger for acquired firms than for acquiring firms in corporate acquisition. Overall, our findings suggest that corporate acquisition has higher impacts on executive compensation for acquired firm CEOs than for acquiring firm CEOs.

The Role And Effect Of Remuneration Consultants On CEO Compensation : Evidence Horn The UK Companic

2018 ◽  
pp. 1
Author(s):  
مريع سعد الهباش ◽  
صالح علي فراج العقلا
Keyword(s):  
Ceo Compensation ◽  
The Uk

CEO Deal-Making Activity, CEO Compensation and Firm Value

2010 ◽  
Author(s):  
Eliezer M. Fich ◽  
Laura T. Starks ◽  
Adam S. Yore
Keyword(s):  
Firm Value ◽  
Ceo Compensation ◽  
Deal Making
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