Abstract

http://ssrn.com/abstract=1987246
 


 



Executive Compensation and Securitization: The Missing Link


Jonathan C. Lipson


Temple University - James E. Beasley School of Law

Ella Mae Matsumura


University of Wisconsin-Madison - Department of Accounting and Information Systems

Emre Unlu


University of Nebraska at Lincoln

Rachel Martin


University of Wisconsin - Madison - Department of Accounting and Information Systems

January 17, 2012

Univ. of Wisconsin Legal Studies Research Paper No. 1194

Abstract:     
We assess the effect that asset securitization has on executive compensation. Securitization is the process whereby firms “sell” financial assets in transactions that bear many economic characteristics of a loan. Scholars and policy makers have expressed concern about the agency costs associated with such transactions, including that they create opportunities for managers to loot companies that engage in them.

We focus on non-financial-services firms, and construct a dataset of over 15,000 firm-year observations, comparing the CEO pay of securitizing firms (1,051) to those that do not (14,301). Panel OLS fixed-effects regressions, year-on-year change regressions, matched sampling and sub-sampling analyses show that securitizers do not, in fact, pay more than non-securitizers. This, in turn, suggests that whatever its other strengths or weaknesses, securitization by non-financial-services firms is unlikely to lead to agency costs hypothesized in the literature.

Number of Pages in PDF File: 44

Keywords: executive compensation, asset securitization, agency costs, empirical analysis

JEL Classification: G14, G32, G35, J33, K12, K22

Accepted Paper Series


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Date posted: January 18, 2012 ; Last revised: June 29, 2012

Suggested Citation

Lipson, Jonathan C. and Matsumura, Ella Mae and Unlu, Emre and Martin, Rachel, Executive Compensation and Securitization: The Missing Link (January 17, 2012). Univ. of Wisconsin Legal Studies Research Paper No. 1194. Available at SSRN: http://ssrn.com/abstract=1987246 or http://dx.doi.org/10.2139/ssrn.1987246

Contact Information

Jonathan C. Lipson (Contact Author)
Temple University - James E. Beasley School of Law ( email )
1719 N. Broad Street
Philadelphia, PA 19122
United States
Ella Mae Matsumura
University of Wisconsin-Madison - Department of Accounting and Information Systems ( email )
School of Business
975 University Avenue
Madison, WI 53706
United States
608-262-9731 (Phone)
608-263-0477 (Fax)
Emre Unlu
University of Nebraska at Lincoln ( email )
Lincoln, NE 68588
United States
Rachel Martin
University of Wisconsin - Madison - Department of Accounting and Information Systems ( email )
School of Business
975 University Avenue
Madison, WI 53706
United States
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