CEO compensation and bank loan contract

Chen Liu, Yan Wendy Wu
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Abstract

Despite syndicated loan accounts for more than 40% of bank commercial loans, little is known about how bank CEO compensation impacts bank syndicated loan contracting. We find that banks with more CEO inside debt have lower non-performance loans and lend to safer borrowers. Using a two-stage selection model, we find that banks with more CEO inside debt extend syndicated loans with a smaller number of lenders in the syndication, lower spread, less restrictive covenant, and longer maturity. These loan terms indicate higher screening effort and borrower credit quality, consistent with the credit quality hypothesis of loan contracting. The findings are robust to potential endogeneity bias and simultaneity of various loan terms.
CEO薪酬与银行贷款合同
尽管银团贷款占银行商业贷款的40%以上,但人们对银行CEO薪酬对银团贷款合同的影响知之甚少。我们发现,CEO内部负债较多的银行不良贷款较少,贷款给更安全的借款人。利用两阶段选择模型,我们发现CEO负债较多的银行发放银团贷款时,银团贷款的出借人数量较少,利差较低,限制性契约较少,期限较长。这些贷款条款表明更高的筛选努力和借款人信用质量,符合贷款合同的信用质量假设。研究结果对潜在的内生性偏见和各种贷款条款的同时性是稳健的。
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