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http://hdl.handle.net/1893/12011| Appears in Collections: | Accounting and Finance Working Papers |
| Title: | Executive Compensation and the Cost of Debt |
| Author(s): | Kabir, Rezaul Li, Hao Veld-Merkoulova, Yulia V |
| Contact Email: | j.w.veld-merkoulova@stir.ac.uk |
| Citation: | Kabir R, Li H & Veld-Merkoulova YV (2013) Executive Compensation and the Cost of Debt. SSRN Working Paper Series, 1537318. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1537318 |
| Keywords: | Executive compensation CEO pay Cost of debt Yield spread |
| Issue Date: | 28-Feb-2013 |
| Date Deposited: | 17-Apr-2013 |
| Publisher: | Social Science Research Network |
| Series/Report no.: | SSRN Working Paper Series, 1537318 |
| Abstract: | This study examines how different components of executive compensation affect the cost of debt. We find that debt-like and equity-like pay components have differing effects: an increase in defined benefit pensions is associated with lower bond yield spread, while higher share holdings lead to higher spreads. In addition, we find that stock options have a mixed impact on the cost of debt whereas cash bonus has no significant impact. Overall, our results indicate that corporate bondholders are fully aware of both risk-taking and risk-avoiding incentives created by various executive pay components. |
| Type: | Working Paper |
| URI: | http://hdl.handle.net/1893/12011 |
| URL: | http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1537318 |
| Rights: | Authors retain copyright. |
| Affiliation: | Accounting & Finance University of Stirling Accounting & Finance |
Files in This Item:
| File | Description | Size | Format | |
|---|---|---|---|---|
| Veld-Merkoulova_2013_Executive_Compensation.pdf | Fulltext - Published Version | 285.6 kB | Adobe PDF | View/Open |
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