Debt ownership by equity-holding managers aligns their incentives more closely with those of creditors, thereby reducing agency costs of debt. We test this hypothesis by examining how terms of bank loans are related to executive pension and deferred compensation, i.e., inside debt held by...

We examine whether executive stock options can induce excessive risk taking by managers in firms' security issue decisions. We find that CEOs whose wealth is more sensitive to stock return volatility due to their option holdings are more likely to choose debt over equity as a capital-raising...