Negative Hedging: Performance-Sensitive Debt and CEOs’ Equity Incentives
研究了CEO股权激励如何影响其使用绩效敏感债务合同，发现薪酬对股价波动敏感的高管倾向于选择更陡峭的定价计划，以增加财务风险获取私利。
Abstract We examine the relation between chief executive officers’ equity incentives and their use of performance-sensitive debt contracts. These contracts require higher or lower interest payments when the borrower’s performance deteriorates or improves, thereby increasing expected costs of financial distress while making a firm riskier to the benefit of option holders. We find that managers whose compensation is more sensitive to stock volatility choose steeper and more convex performance pricing schedules, while those with high delta incentives choose flatter, less convex pricing schedules. Performance pricing contracts therefore seem to provide a channel for managers to increase firms’ financial risk to gain private benefits.