Executive Compensation and the Maturity Structure of Corporate Debt

• 成果类型: Article
• 署名作者: Brockman, Paul; Martin, Xiumin; Unlu, Emre
• 署名单位: Lehigh University; Washington University (WUSTL); University of Nebraska System; University of Nebraska Lincoln
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/j.1540-6261.2010.01563.x
• 发表日期: 2010
• 页码: 1123-1161
• 关键词: STOCK OPTION PORTFOLIOS; GROWTH OPPORTUNITIES; equity incentives; capital structure; RISK; determinants; SENSITIVITIES; performance; INVESTMENT; OWNERSHIP

摘要

Executive compensation influences managerial risk preferences through executives' portfolio sensitivities to changes in stock prices (delta) and stock return volatility (vega). Large deltas discourage managerial risk-taking, while large vegas encourage risk-taking. Theory suggests that short-maturity debt mitigates agency costs of debt by constraining managerial risk preferences. We posit and find evidence of a negative (positive) relation between CEO portfolio deltas (vegas) and short-maturity debt. We also find that short-maturity debt mitigates the influence of vega- and delta-related incentives on bond yields. Overall, our empirical evidence shows that short-term debt mitigates agency costs of debt arising from compensation risk.