3 ms·
If the cash portions of salaries are being paid out of revenues (company is profitable), why does the stock price matter?
by superuser2 11y ago
If the cash portions of salaries are being paid out of revenues (company is profitable), why does the stock price matter?
- brandmeyer 11y agoDownward nominal wage rigidity can be rephrased as: Nobody likes to get a pay cut. (Base) pay cuts piss employees off. When revenues fall, the stock price will fall, and automatically reduce employee salary as a result. But since the human perception of stock compensation is more like "gravy" than "essential to my way of life", I don't think that a stock price drop is as perceived to be as bad as a nominal pay cut, even though real employee pay is cut in either case.