Title

Corporate Creditors and Executive Compensation

Award Year

2010

Grant Type

Early Career Research Award

Description

In traditional views of “corporate governance,” stockholders are seen as the ones who influence decisions through their voting rights. However, emerging research is beginning to highlight that creditors are an important corporate stakeholder who can and do influence decision-making. This research examines the role that corporate creditors – primarily banks – play in influencing corporate decisions, including the choice and compensation of senior executives. In particular, the study analyzes the consequence of loan covenant violations on executive turnover and incentives built into compensation contracts.

Grant Product

Creditor Control Rights, Corporate Governance, and Firm Value
Review of Financial Studies June 2012, 25(6): 1713-1761

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