This demonstrates the ridiculousness of stock price based compensation as the stock price in the short term is more based on emotion and extraneous events more than an individuals management. And it can be the total reverse where a great CEO could be punished for no reason related to his/her skill or management capability ..... I also se…
This demonstrates the ridiculousness of stock price based compensation as the stock price in the short term is more based on emotion and extraneous events more than an individuals management. And it can be the total reverse where a great CEO could be punished for no reason related to his/her skill or management capability ..... I also see stock price based compensation as causing short term decisions that have negative long term impact. This is a RED FLAG -- monty python RUNAWAY situation....
The one thing nobody can control is a stock price, and to your point, incentives based exclusively on stock price can be a motive. That's what such incentives should tied to fundamentals and/or, in the least, have a long tail of a holding period. Also, careful about conflating stock-based incentives with stock-based compensation. ;-)
This demonstrates the ridiculousness of stock price based compensation as the stock price in the short term is more based on emotion and extraneous events more than an individuals management. And it can be the total reverse where a great CEO could be punished for no reason related to his/her skill or management capability ..... I also see stock price based compensation as causing short term decisions that have negative long term impact. This is a RED FLAG -- monty python RUNAWAY situation....
The one thing nobody can control is a stock price, and to your point, incentives based exclusively on stock price can be a motive. That's what such incentives should tied to fundamentals and/or, in the least, have a long tail of a holding period. Also, careful about conflating stock-based incentives with stock-based compensation. ;-)