We examine how executive equity risk-taking incentives affect firms’ choice of debt structure. Using a longitudinal sample of U.S. firms, we document that when executive compensation is more sensitive to stock volatility (i.e., has higher vega), firms reduce their reliance on bank debt financing. We utilize the passage of the Financial Accounting Standard (FAS) 123R option-expensing regulation as an exogenous shock to management option compensation to account for potential endogeneity. In cross-sectional analyses, we find that the documented effect of vega is amplified among firms with higher growth opportunities and more opaque financial information; we also find vega's effect is mitigated in firms with limited abilities to tap into public debt market. Supplemental analyses suggest that firms with higher vega face more stringent bank loan covenants. We conclude that, by encouraging risk-taking, higher vega reduces firms’ reliance on bank debt financing in order to avoid more stringent bank monitoring.

我们研究了高管股权冒险激励如何影响公司的债务结构选择。使用美国公司的纵向样本，我们记录了当高管薪酬对股票波动更敏感（即具有更高的 vega）时，公司会减少对银行债务融资的依赖。我们利用财务会计标准 (FAS) 123R 期权费用化法规的通过作为对管理层期权补偿的外生冲击，以解释潜在的内生性。在横断面分析中，我们发现 vega 的记录效应在具有更高增长机会和更不透明财务信息的公司中被放大；我们还发现 vega 的影响在进入公共债务市场能力有限的公司中得到缓解。补充分析表明，vega 较高的公司面临更严格的银行贷款契约。我们的结论是，通过鼓励冒险，更高的 vega 减少了公司对银行债务融资的依赖，以避免更严格的银行监控。