Overpaid CEOs got FDIC debt guarantees
Linus Wilson and
Yan Wendy Wu ()
The North American Journal of Economics and Finance, 2018, vol. 45, issue C, 101-115
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 evidence that large, systemically important banks were more likely to obtain FDIC debt guarantees.
Keywords: Bailout; CEO pay; Loan guarantees; Temporary Liquidity Guarantee Program; TLGP (search for similar items in EconPapers)
JEL-codes: G01 G18 G2 G28 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecofin:v:45:y:2018:i:c:p:101-115
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