Does CEO inside debt compensation benefit both shareholders and debtholders?

被引：11
作者：
Borah, Nilakshi [1 ]
James, Hui Liang [2 ]
Park, Jung Chul [3 ]
机构：
[1] Univ Wisconsin, Dept Finance, La Crosse, WI 54601 USA
[2] Univ Texas Tyler, Dept Accounting Finance & Business Law, Tyler, TX 75799 USA
[3] Univ S Florida, Dept Finance, 4202 E Fowler Ave,BSN3403, Tampa, FL 33620 USA
来源：
REVIEW OF QUANTITATIVE FINANCE AND ACCOUNTING | 2020年 / 54卷 / 01期
关键词：
Inside debt; Dividend policy; Firm valuation; Agency theory; FREE CASH FLOW; DIVIDEND PAYOUT POLICY; EXECUTIVE-COMPENSATION; CORPORATE GOVERNANCE; FINANCIAL STRUCTURE; AGENCY PROBLEMS; DEFAULT RISK; FIRM; OWNERSHIP; HOLDINGS;
D O I：
10.1007/s11156-018-00786-0
中图分类号：
F8 [财政、金融];
学科分类号：
0202 ;
摘要：
We examine whether the proportion of CEO inside debt holdings (pension and deferred compensation) to stock holdings benefit both shareholders and debtholders by relating CEO inside debt to a firm's dividend payout policies. Based on the positive association of CEO inside debt and the propensity and the size of the dividend payout, we find that firms paying their CEOs with large inside debt present the lower cost of debt and default risk, and these benefits transfer to better firm performance and valuation. Moreover, we find that CEO inside debt is related to superior firm performance only in dividend-paying firms. Dividends tend to increase when firms with high agency costs of equity use inside debt. We conclude that dividends serve as a channel through which CEO inside debt compensation mitigates both agency costs of debt and agency costs of equity.
引用
收藏
页码：159 / 203
页数：45
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