IDEAS home Printed from https://ideas.repec.org/a/eee/corfin/v12y2006i3p516-535.html
   My bibliography  Save this article

Can the agency costs of debt and equity explain the changes in executive compensation during the 1990s?

Author

Listed:
  • Bryan, Stephen
  • Nash, Robert
  • Patel, Ajay

Abstract

No abstract is available for this item.

Suggested Citation

  • Bryan, Stephen & Nash, Robert & Patel, Ajay, 2006. "Can the agency costs of debt and equity explain the changes in executive compensation during the 1990s?," Journal of Corporate Finance, Elsevier, vol. 12(3), pages 516-535, June.
    • Handle: RePEc:eee:corfin:v:12:y:2006:i:3:p:516-535
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0929-1199(05)00075-1
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Lisa Meulbroek, 2001. "The Efficiency of Equity-Linked Compensation: Understanding the Full Cost of Awarding Executive Stock Options," Financial Management, Financial Management Association, vol. 30(2), Summer.
    2. Bryan, Stephen & Hwang, LeeSeok & Lilien, Steven, 2000. "CEO Stock-Based Compensation: An Empirical Analysis of Incentive-Intensity, Relative Mix, and Economic Determinants," The Journal of Business, University of Chicago Press, vol. 73(4), pages 661-693, October.
    3. Berry, Tammy K. & Paige Fields, L. & Wilkins, Michael S., 2006. "The interaction among multiple governance mechanisms in young newly public firms," Journal of Corporate Finance, Elsevier, vol. 12(3), pages 449-466, June.
    4. Cuny, Charles J. & Jorion, Philippe, 1995. "Valuing executive stock options with endogenous departure," Journal of Accounting and Economics, Elsevier, vol. 20(2), pages 193-205, September.
    5. John, Teresa A & John, Kose, 1993. "Top-Management Compensation and Capital Structure," Journal of Finance, American Finance Association, vol. 48(3), pages 949-974, July.
    6. Jensen, Michael C, 1986. "Agency Costs of Free Cash Flow, Corporate Finance, and Takeovers," American Economic Review, American Economic Association, vol. 76(2), pages 323-329, May.
    7. Barclay, Michael J & Smith, Clifford W, Jr, 1995. "The Maturity Structure of Corporate Debt," Journal of Finance, American Finance Association, vol. 50(2), pages 609-631, June.
    8. Bodie, Zvi & Taggart, Robert A, Jr, 1978. "Future Investment Opportunities and the Value of the Call Provision on a Bond," Journal of Finance, American Finance Association, vol. 33(4), pages 1187-1200, September.
    9. Yermack, David, 1995. "Do corporations award CEO stock options effectively?," Journal of Financial Economics, Elsevier, vol. 39(2-3), pages 237-269.
    10. Begley, Joy & Feltham, Gerald A., 1999. "An empirical examination of the relation between debt contracts and management incentives," Journal of Accounting and Economics, Elsevier, vol. 27(2), pages 229-259, April.
    11. Carpenter, Jennifer N., 1998. "The exercise and valuation of executive stock options," Journal of Financial Economics, Elsevier, vol. 48(2), pages 127-158, May.
    12. Murphy, Kevin J., 1999. "Executive compensation," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 38, pages 2485-2563, Elsevier.
    13. Easterbrook, Frank H, 1984. "Two Agency-Cost Explanations of Dividends," American Economic Review, American Economic Association, vol. 74(4), pages 650-659, September.
    14. Graham, John R., 1996. "Proxies for the corporate marginal tax rate," Journal of Financial Economics, Elsevier, vol. 42(2), pages 187-221, October.
    15. Perry, Tod & Zenner, Marc, 2001. "Pay for performance? Government regulation and the structure of compensation contracts," Journal of Financial Economics, Elsevier, vol. 62(3), pages 453-488, December.
    16. Huddart, Steven, 1994. "Employee stock options," Journal of Accounting and Economics, Elsevier, vol. 18(2), pages 207-231, September.
    17. Brick, Ivan E. & Palmon, Oded & Wald, John K., 2006. "CEO compensation, director compensation, and firm performance: Evidence of cronyism?," Journal of Corporate Finance, Elsevier, vol. 12(3), pages 403-423, June.
    18. Stohs, Mark Hoven & Mauer, David C, 1996. "The Determinants of Corporate Debt Maturity Structure," The Journal of Business, University of Chicago Press, vol. 69(3), pages 279-312, July.
    19. Comment, Robert & Jarrell, Gregg A., 1995. "Corporate focus and stock returns," Journal of Financial Economics, Elsevier, vol. 37(1), pages 67-87, January.
    20. Denis, David J. & Hanouna, Paul & Sarin, Atulya, 2006. "Is there a dark side to incentive compensation?," Journal of Corporate Finance, Elsevier, vol. 12(3), pages 467-488, June.
    21. Kenneth Lehn & Annette Poulsen, 1989. "Free Cash Flow and Stockholder Gains in Going Private Transactions," Journal of Finance, American Finance Association, vol. 44(3), pages 771-787, July.
    22. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    23. Bizjak, John M. & Brickley, James A. & Coles, Jeffrey L., 1993. "Stock-based incentive compensation and investment behavior," Journal of Accounting and Economics, Elsevier, vol. 16(1-3), pages 349-372, April.
    24. Gaver, Jennifer J. & Gaver, Kenneth M., 1993. "Additional evidence on the association between the investment opportunity set and corporate financing, dividend, and compensation policies," Journal of Accounting and Economics, Elsevier, vol. 16(1-3), pages 125-160, April.
    25. Ohlson, Ja, 1980. "Financial Ratios And The Probabilistic Prediction Of Bankruptcy," Journal of Accounting Research, Wiley Blackwell, vol. 18(1), pages 109-131.
    26. Myers, Stewart C., 1977. "Determinants of corporate borrowing," Journal of Financial Economics, Elsevier, vol. 5(2), pages 147-175, November.
    27. Michael S. Rozeff, 1982. "Growth, Beta And Agency Costs As Determinants Of Dividend Payout Ratios," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 5(3), pages 249-259, September.
    28. repec:bla:jfinan:v:44:y:1989:i:3:p:771-87 is not listed on IDEAS
    29. Nash, Robert C. & Netter, Jeffry M. & Poulsen, Annette B., 2003. "Determinants of contractual relations between shareholders and bondholders: investment opportunities and restrictive covenants," Journal of Corporate Finance, Elsevier, vol. 9(2), pages 201-232, March.
    30. Smith, Clifford Jr. & Warner, Jerold B., 1979. "On financial contracting : An analysis of bond covenants," Journal of Financial Economics, Elsevier, vol. 7(2), pages 117-161, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Aitzaz Ahsan Alias Sarang & Nicolas Aubert & Xavier Hollandts, 2024. "Board gender diversity and the cost of equity: What difference does gender quota legislation make?," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 29(2), pages 2193-2213, April.
    2. Hirth, Stefan & Uhrig-Homburg, Marliese, 2010. "Investment timing, liquidity, and agency costs of debt," Journal of Corporate Finance, Elsevier, vol. 16(2), pages 243-258, April.
    3. Chourou, Lamia & Abaoub, Ezzeddine & Saadi, Samir, 2008. "The economic determinants of CEO stock option compensation," Journal of Multinational Financial Management, Elsevier, vol. 18(1), pages 61-77, February.
    4. Koziol, Christian & Lawrenz, Jochen, 2010. "Optimal design of rating-trigger step-up bonds: Agency conflicts versus asymmetric information," Journal of Corporate Finance, Elsevier, vol. 16(2), pages 182-204, April.
    5. Kabir, Rezaul & Li, Hao & Veld-Merkoulova, Yulia V., 2013. "Executive compensation and the cost of debt," Journal of Banking & Finance, Elsevier, vol. 37(8), pages 2893-2907.
    6. Lin, Hsuan-Chu & Chou, Ting-Kai & Wang, Wen-Gine, 2012. "Capital structure and executive compensation contract design: A theoretical and empirical analysis," Journal of Banking & Finance, Elsevier, vol. 36(1), pages 209-224.
    7. Chen, Xiaoying (Cindy) & Yur-Austin, Jasmine, 2007. "Re-measuring agency costs: The effectiveness of blockholders," The Quarterly Review of Economics and Finance, Elsevier, vol. 47(5), pages 588-601, December.
    8. Duru, Augustine & Iyengar, Raghavan J. & Zampelli, Ernest M., 2012. "Performance choice, executive bonuses and corporate leverage," Journal of Corporate Finance, Elsevier, vol. 18(5), pages 1286-1305.
    9. Stephen Bryan & Robert Nash & Ajay Patel, 2010. "How the Legal System Affects the Equity Mix in Executive Compensation," Financial Management, Financial Management Association International, vol. 39(1), pages 393-418, March.
    10. Ertugrul, Mine & Hegde, Shantaram, 2008. "Board compensation practices and agency costs of debt," Journal of Corporate Finance, Elsevier, vol. 14(5), pages 512-531, December.
    11. Cook, Douglas O. & Fu, Xudong & Tang, Tian, 2014. "The effect of liquidity and solvency risk on the inclusion of bond covenants," Journal of Banking & Finance, Elsevier, vol. 48(C), pages 120-136.
    12. Roshanthi Dias, 2017. "The role of managerial risk-taking in the ‘rise and fall’ of the CDS market," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 57, pages 117-145, April.
    13. Bryan, Stephen & Nash, Robert & Patel, Ajay, 2015. "The effect of cultural distance on contracting decisions: The case of executive compensation," Journal of Corporate Finance, Elsevier, vol. 33(C), pages 180-195.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Stephen Bryan & Robert Nash & Ajay Patel, 2010. "How the Legal System Affects the Equity Mix in Executive Compensation," Financial Management, Financial Management Association International, vol. 39(1), pages 393-418, March.
    2. Coles, Jeffrey L. & Daniel, Naveen D. & Naveen, Lalitha, 2006. "Managerial incentives and risk-taking," Journal of Financial Economics, Elsevier, vol. 79(2), pages 431-468, February.
    3. Carola Frydman & Dirk Jenter, 2010. "CEO Compensation," Annual Review of Financial Economics, Annual Reviews, vol. 2(1), pages 75-102, December.
    4. Rosenberg, Matts, 2003. "Stock Option Compensation in Finland: An Analysis of Economic Determinants, Contracting Frequency, and Design," Working Papers 496, Hanken School of Economics.
    5. Gul, Ferdinand A., 1999. "Growth opportunities, capital structure and dividend policies in Japan," Journal of Corporate Finance, Elsevier, vol. 5(2), pages 141-168, June.
    6. Nash, Robert C. & Netter, Jeffry M. & Poulsen, Annette B., 2003. "Determinants of contractual relations between shareholders and bondholders: investment opportunities and restrictive covenants," Journal of Corporate Finance, Elsevier, vol. 9(2), pages 201-232, March.
    7. Muurling, Rutger & Lehnert, Thorsten, 2004. "Option-based compensation: a survey," The International Journal of Accounting, Elsevier, vol. 39(4), pages 365-401.
    8. Ren, Siewan & Wright, Anna & Wyatt, Anne, 2012. "Stock option use by Australian IPOs," Journal of Contemporary Accounting and Economics, Elsevier, vol. 8(1), pages 1-22.
    9. Shao-Chi Chang & Sheng-Syan Chen & Ailing Hsing & Chia Huang, 2007. "Investment opportunities, free cash flow, and stock valuation effects of secured debt offerings," Review of Quantitative Finance and Accounting, Springer, vol. 28(2), pages 123-145, February.
    10. Bryan, Stephen & Nash, Robert & Patel, Ajay, 2015. "The effect of cultural distance on contracting decisions: The case of executive compensation," Journal of Corporate Finance, Elsevier, vol. 33(C), pages 180-195.
    11. Barclay, Michael J. & Fu, Fangjian & Smith, Clifford W., 2021. "Seasoned equity offerings and corporate financial management," Journal of Corporate Finance, Elsevier, vol. 66(C).
    12. Liljeblom, Eva & Pasternack, Daniel & Rosenberg, Matts, 2011. "What determines stock option contract design?," Journal of Financial Economics, Elsevier, vol. 102(2), pages 293-316.
    13. Paul André & M. Martin Boyer & Robert Gagné, 2002. "Do CEOs Exercise Their Stock Options Earlier than Other Executives?," CIRANO Working Papers 2002s-71, CIRANO.
    14. Connelly, J. Thomas & Limpaphayom, Piman & Nagarajan, Nandu J., 2012. "Form versus substance: The effect of ownership structure and corporate governance on firm value in Thailand," Journal of Banking & Finance, Elsevier, vol. 36(6), pages 1722-1743.
    15. Lin, Hsuan-Chu & Chou, Ting-Kai & Wang, Wen-Gine, 2012. "Capital structure and executive compensation contract design: A theoretical and empirical analysis," Journal of Banking & Finance, Elsevier, vol. 36(1), pages 209-224.
    16. Ortiz-Molina, Hernan, 2007. "Executive compensation and capital structure: The effects of convertible debt and straight debt on CEO pay," Journal of Accounting and Economics, Elsevier, vol. 43(1), pages 69-93, March.
    17. Correia, Maria do Rosário, 2008. "The choice of maturity and additional covenants in debt contracts: A panel data approach," Research in International Business and Finance, Elsevier, vol. 22(3), pages 284-300, September.
    18. Chen, Dong, 2012. "Classified boards, the cost of debt, and firm performance," Journal of Banking & Finance, Elsevier, vol. 36(12), pages 3346-3365.
    19. Cook, Douglas O. & Fu, Xudong & Tang, Tian, 2014. "The effect of liquidity and solvency risk on the inclusion of bond covenants," Journal of Banking & Finance, Elsevier, vol. 48(C), pages 120-136.
    20. Lin, Steve & Sawani, Assma & Wang, Changjiang, 2023. "Managerial stock ownership, debt covenants, and the cost of debt," Pacific-Basin Finance Journal, Elsevier, vol. 77(C).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:corfin:v:12:y:2006:i:3:p:516-535. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/jcorpfin .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.