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It's not that they cannot. They don't have an incentive to do it. If I'm being paid for my performance while I'm a CEO, why would I spend money today (and hurt
by The_Beta 5y ago
It's not that they cannot. They don't have an incentive to do it.
If I'm being paid for my performance while I'm a CEO, why would I spend money today (and hurt my performance today) to fix a problem that MIGHT affect the company in 20 years
- ODILON_SATER 5y agoIt just that it is more likely that founders genuinely care about their baby, so they have more incentive to make the company more resilient to long term risks. I don't think this is an absurd claim. It's not that every founder is the same, there are founders who behave just like most CEOs.
- jonas21 5y agoNo, they literally cannot. Because if they try to, they will be fired by the board for failing to perform and replaced with someone who will undo their work.
- tuatoru 5y agoTo align incentives, perhaps we should have a law specifying that executive stock options can only be exercised after a delay of 17 years or more.
- kansface 5y agoBecause you aren't actually being paid for your performance as CEO. You are being "paid" by increasing the value of the company you mostly own. Its up to you to play the long game or the short game. Ivy MBAs don't even have the option.