Corpus ID: 167671398

Three Essays on Inside Debt

  title={Three Essays on Inside Debt},
  author={Reilly S. White},
This dissertation consists of three essays examining issues related to executive inside debt on firm risk, dividend policy, and compensation structure. In the first essay, we use a hand-collected executive pension database to study how both CEO and non-CEO executive compensation structures affect the overall risk of a firm. We extend the research of Sundaram and Yermack (2007) to non-CEO executives for the first time, demonstrate how the difference in compensation leverage between CEO and non… Expand
CEO Risk Preferences and Dividend Policy Decisions
This study examines whether risk aversion-inducing CEO compensation motivates managers to pay more dividends regardless of investor preferences. Using inside debt (i.e., pensions and deferredExpand


Inside Debt and the Design of Corporate Debt Contracts
Theory posits that managerial holdings of debt (“inside debt”) align managers’ incentives with those of outside debtholders. Executive pensions, which consist of ERISA-qualified rank-and-file (RAF)Expand
Executive Financial Incentives and Payout Policy: Firm Responses to the 2003 Dividend Tax Cut
Using the 2003 reduction in dividend tax rates to identify an exogenous change in the after-tax value of dividends to shareholders, we test whether stock holdings among company executives is anExpand
Inside Debt and the Design of Corporate Debt Contracts
Overall, the evidence suggests that executive debt-like compensation is only effective at resolving stockholder--debtholder conflicts when its payoffs are truly Debt-like and that lenders' perceptions are affected not only by the magnitude of debt- like compensation but also by its seniority. Expand
The CEO Pay Slice
We investigate the relation between the CEO Pay Slice (CPS)--the fraction of the aggregate compensation of the top-five executive team captured by the Chief Executive Officer--and the value,Expand
Inside Debt, Bank Default Risk and Performance during the Crisis
In this paper, we examine whether the structure of the chief executive officer’s (CEO) compensation package can explain default risk and performance in bank holding companies (BHCs) during the recentExpand
Pay Me Later: Inside Debt and its Role in Managerial Compensation
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 capitalizationExpand
Managerial Ownership of Debt and Bank Loan Contracting
Debt ownership by equity-holding managers aligns their incentives more closely with those of creditors, thereby reducing agency costs of debt. We test this hypothesis by examining how terms of bankExpand
Seeking Safety: The Relation between CEO Inside Debt Holdings and the Riskiness of Firm Investment and Financial Policies
CEO inside debt holdings (pension benefits and deferred compensation) are generally unsecured and unfunded liabilities of the firm. Because these characteristics of inside debt expose the CEO toExpand
Top‐Management Compensation and Capital Structure
The interrelationship between top-management compensation and the design and mix of external claims issued by a firm is studied. The optimal managerial compensation structures depend on not only theExpand
Investor Reactions to CEOs’ Inside Debt Incentives
Pensions and deferred compensation represent substantial components of CEO incentives. We study stockholder and bondholder reactions to companies’ initial reports of CEOs’ inside debt positionsExpand