Corpus ID: 198922907

Cannot Afford to Let Go: CEO Risk-taking Incentives When their Predecessors are Firm Creditors

  title={Cannot Afford to Let Go: CEO Risk-taking Incentives When their Predecessors are Firm Creditors},
  author={Angelica Gonzalez and Jens Hagendorff and Georgios Voulgaris},
We show evidence of a legacy effect on executive pay when previous CEOs act as unsecured creditors to firms after they retire. We find a negative association between the pension claims of retiring CEOs and the risk-taking incentives imbedded in the pay of their successors. Further, CEOs with higher pension claims are more likely to remain on the board post-retirement. Since these effects are driven by the unfunded and unsecured components of CEO pensions, we argue that retired CEOs with high… Expand

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