Pay Me Later: Inside Debt and its Role in Managerial Compensation

  title={Pay Me Later: Inside Debt and its Role in Managerial Compensation},
  author={R. K. Sundaram and D. Yermack},
  journal={Corporate Finance: Governance},
  • R. K. Sundaram, D. Yermack
  • Published 2005
  • Business, Economics
  • Corporate Finance: Governance
  • Though widely used in executive compensation, inside debt has been almost entirely overlooked by prior work. We initiate this research by studying CEO pension arrangements in 237 large capitalization firms. Among our findings are that CEO compensation exhibits a balance between debt and equity incentives; the balance shifts systematically away from equity and toward debt as CEOs grow older; annual increases in pension entitlements represent about 10% of overall CEO compensation, and about 13… CONTINUE READING
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