Someone at Pfizer will be getting $200 million this year and the stock performance has the investors ready to jump off the roof.
2006-12-22 11:04:51 · 7 answers · asked by liberty11235 6 in Business & Finance ➔ Investing
Yes. The most important goal for corporate employees is to increase shareholder wealth. Compensation should be directly tied to stock performance. If the stock performs well, the CEO should be compensated well because at his guidance, the company has increased wealth for every investor of the company. If the stock performs poorly, then the CEO should be penalized.
2006-12-23 03:31:25 · answer #1 · answered by trater04 1 · 1⤊ 0⤋
No! Don't base compensation on stock performance directly.
There are many ways to manipulate earnings and other published information that investors use to evaluate the performance of a company. This means that the CEO has incentives to manipulate the company's books to make it look good. Therefore, stock performance is no real indicator of the company's performance over short periods of time.
On the other hand, if you give the CEO stock OPTIONS that can be exercised in several years, the CEO has incentives to make longer-term decisions that are more in the interests of the firm.
2006-12-22 11:13:34 · answer #2 · answered by Allan 6 · 0⤊ 0⤋
This is a pet peeve of mine. I wouldn't mind the CEOs making a lot of money if their performance warrented it, but that is so often not the case as in the example you mentioned. So, YES, I would love it if CEO income was somehow linked to the stock market but they and their boards of directors generally are pretty chummy so I don't see it happening anytime soon. Us poor little stockholders will probably just continue to get screwed.
2006-12-22 11:12:32 · answer #3 · answered by Terry 3 · 1⤊ 0⤋
No! They lie, steal and cheat to make it look good and cover up all kinds of crap that is going on. Watch the movie "The Corporation." Very good movie that explains the greed and craziness of corporations in the united states.
2006-12-22 15:10:28 · answer #4 · answered by SelfGrill 3 · 0⤊ 0⤋
Gregory L You are on TV now...
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2006-12-22 11:17:19 · answer #5 · answered by cgb g 1 · 0⤊ 1⤋
No. It is time to stop rewarding greed in this country.
2006-12-22 11:11:56 · answer #6 · answered by ROBERT L O 4 · 0⤊ 2⤋
No.
2006-12-22 11:11:01 · answer #7 · answered by Shaggy 3 · 0⤊ 2⤋