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I was thinking about the golden parachutes as well. They are in effect an incentive for execs to take bigger and bigger risks to deliver profits. If their gam
by ActionHank 3y ago
I was thinking about the golden parachutes as well.
They are in effect an incentive for execs to take bigger and bigger risks to deliver profits.
If their gamble pays off, they profit, if their gamble doesn't pay off they profit.
- lumost 3y agoMy understanding is that prior to the 70s most CEOs were effectively ceo for life. They were strongly incentivized to preserve the business, even if that meant keeping it at a low/no growth state. When the MBA and Private Equity craze kicked in, we had golden parachutes and other instruments which pushed companies into growth mode. It is not immediately clear to me that incentivizing short term growth is a wise business strategy for the long term.