4 ms·
You under-appreciate how much control a united, semi-competent C-suite can have over a business where shares are largely held by passive institutional investors
by nugget 11y ago
You under-appreciate how much control a united, semi-competent C-suite can have over a business where shares are largely held by passive institutional investors. As long as the executives don't run it into the ground they can do pretty much whatever they want. Stock based compensation over a long (5-10 years) time horizon seems to be the best way to align incentives, but is under-utilized. I wouldn't have believed this until I experienced it first hand.
- hwstar 11y agoIn my case I've seen executives do far, far worse. Shareholder apathy at its finest... How about having a string of continuous losses for over 6 years taking the valuation of a 250 million dollar company to practically worthless. Was management changed by the shareholders? No. Did the shareholders care if the company wasn't making a profit for so long? Apparently not.