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Listen "Ep. 4: Overpaid CEOs Got FDIC Debt Guarantees"
Episode Synopsis
Linus Wilson reads his joint work at
https://ssrn.com/abstract=1977345
"Overpaid CEOs Got FDIC Debt Guarantees"
By Linus Wilson, University of Louisiana at Lafayette and Yan Wendy Wu, Wilfrid Laurier University
abstract
From 2008 to 2009, the FDIC guaranteed hundreds of billions of dollars of newly issued bank debt through the Temporary Liquidity Guarantee Program (TLGP). We find that CEOs making more than their peer groups were significantly more likely to steer their companies to obtain federal guarantees for their banks’ debt. The average bank in our sample with a debt guarantee had a CEO who was paid $1.6 million per year more than the average CEO in his or her peer group. In addition, there is strong evidence that large, systemically important banks were more likely to obtain FDIC debt guarantees.
Keywords: bailout, banks, CDS, Citigroup, CEO Compensation, corporate governance, credit default swaps, debt, debt guarantees, Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, emergency lending, FDIC, Federal Deposit Insurance Corporation, Federal Reserve, financial crisis, FOIA, Freedom
Get the show notes blog at www.financeprofessor.org and sign up for the free newsletter. There will be links to the facebook page. The podcast is on iTunes
https://itunes.apple.com/us/podcast/the-finance-professor-podcast/id1226939293?mt=2
Stitcher
http://www.stitcher.com/podcast/linus-wilson/the-finance-professor-podcast
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https://ssrn.com/abstract=1977345
"Overpaid CEOs Got FDIC Debt Guarantees"
By Linus Wilson, University of Louisiana at Lafayette and Yan Wendy Wu, Wilfrid Laurier University
abstract
From 2008 to 2009, the FDIC guaranteed hundreds of billions of dollars of newly issued bank debt through the Temporary Liquidity Guarantee Program (TLGP). We find that CEOs making more than their peer groups were significantly more likely to steer their companies to obtain federal guarantees for their banks’ debt. The average bank in our sample with a debt guarantee had a CEO who was paid $1.6 million per year more than the average CEO in his or her peer group. In addition, there is strong evidence that large, systemically important banks were more likely to obtain FDIC debt guarantees.
Keywords: bailout, banks, CDS, Citigroup, CEO Compensation, corporate governance, credit default swaps, debt, debt guarantees, Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, emergency lending, FDIC, Federal Deposit Insurance Corporation, Federal Reserve, financial crisis, FOIA, Freedom
Get the show notes blog at www.financeprofessor.org and sign up for the free newsletter. There will be links to the facebook page. The podcast is on iTunes
https://itunes.apple.com/us/podcast/the-finance-professor-podcast/id1226939293?mt=2
Stitcher
http://www.stitcher.com/podcast/linus-wilson/the-finance-professor-podcast
and Google Play for Android
Subscribe for free!
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