Link Found Between CEO Pay, Credit Risk

Laughlin, Kate
August 2005
Investment Dealers' Digest;8/1/2005, Vol. 71 Issue 30, p7
Trade Publication
Focuses on a study by Moody's Investors Service Inc. which found an empirical link between excessive CEO compensation and increased credit risk, in the U.S. Indication that issuers with inexplicably high CEO compensation tend to have their credit ratings downgraded and default more often; Possibility that performance-based compensation packages could induce managers to value short-term results over long-term financial solvency; Features of the buyout of Toys "R" Us Inc. which provides a relevant example of the link between credit risk and excessive pay.


Related Articles

  • CEO Pay Linked To Poor Company Credit.  // Bank Loan Report;8/1/2005, Vol. 20 Issue 30, p1 

    Reports on the study by Moody's Investors Service Inc. which found an empirical link between excessive CEO compensation and increased credit risk, in the U.S. Need for investors to be aware of the increased threat that excessive CEO pay poses on an issuer's ability to repay debt; Indication that...

  • Markets and managers shrug off UK rating downgrade. Jackson, Gary // Money Marketing (Online Edition);2/28/2013, p64 

    The article focuses on the move of Moody's Investors Service Inc. to strip Great Britain of its coveted AAA credit rating. The credit ratings agency to Aa1 after it cited the weak medium-term growth forecast, the challenges this creates for the fiscal consolidation programme as well as a...

  • Moody's Downgrades Erie County, N.Y., to Baal From A3. Whalen, Robert // Bond Buyer;3/28/2005, Vol. 351 Issue 32098, p44 

    Reports on the rating given by Moody's Investor Services to Erir County, New York. Placement of the credit on watch for possible further negative action; Impact of the rating on the outstanding general obligation debt.

  • Moody's Returns Richmond, Calif .'s Debt to Investment Grade. Kelemen, Jasmina // Bond Buyer;1/13/2005, Vol. 351 Issue 32049, p3 

    The article reports on the upgradation of the credit rating of Richmond, California by Moody's Investors Service Inc. Moody's Investors Service has restored Richmond's issuer credit rating to investment grade, citing a financial turnaround for the city a year after it discovered a US$35 million...

  • Louisiana's Plaquemines Parish Schools Receive Upgrade. DeSue, Tedra // Bond Buyer;3/3/2006, Vol. 355 Issue 32331, p36 

    The article reports that Moody's Investors Service has upgraded the credit rating of Plaquemines Parish School Board in Louisiana. Moody's also assigned a positive outlook for the parish despite the financial challenges it faced because of Hurricane Katrina. Moody's analyst Kristin Button...

  • Contagion fears grow over Greek debt risks.  // Fund Strategy;6/21/2011, p12 

    The article reports that Moody's Investors Service is considering a downgraded credit rating for banks involved and exposed to the Greek government debt. The credit ratings agency plans to revise its rating for Credit Agricole, BNP Paribas and Societe Generale due to the possibility of...

  • Study links excessive CEO compensation with higher credit risk.  // Secured Lender;Nov/Dec2005, Vol. 61 Issue 6, p12 

    The article presents the findings of a study on the impact of compensation of CEO on credit obligations of the company, conducted by Moody's Investor Service. It examined 43 companies that defaulted on their debts between 1993 and 2003. It emphasized that companies paying their CEO well do not...

  • Mosaic Up On Reduced Debt, Propex Down On Weak Cash Flow. R. K. // Bank Loan Report;10/15/2007, Vol. 22 Issue 39, p7 

    The article reports that Moody's Investors Service Inc. has upgraded the $351 million credit facility of Mosaic Co. and downgraded the $310 million credit platform of Propex Inc. It is stated that Moody's move to upgrade Mosaic's credit facility to Baa2 from Ba1 is due to the latter's strong...

  • Colonie, N.Y., Debt Cut to A2 by Moody's.  // Bond Buyer;5/3/2006, Vol. 356 Issue 32373, p2 

    The article reports on the rating assigned by Moody's Investors Service to the multimillion-dollar in Series 2006 refunding serial bonds in Colonie, New York. It also downgraded the town's outstanding parity debt to A2 with a negative outlook from Aa3. The downgrade reflects an accumulated...


Read the Article


Sorry, but this item is not currently available from your library.

Try another library?
Sign out of this library

Other Topics