From a business point of view the problem is that you're rewarding your managers for the price of the stock. If managers get rewarded for the price of stock, gu

From a business point of view the problem is that you're rewarding your managers for the price of the stock. If managers get rewarded for the price of stock, guess what they'll be spending their time on? Now if you're a free market fundamentalist, you probably believe that increasing stock price is the same as increasing business value. After all, the free market is always right. The rest of us know that the two things aren't the same, and that there are easier ways to push stock price than building value. So obviously that's what he spends his time doing. The quote comes to mind: when a measurement becomes a target, it ceases to be a useful measurement, at least in the sense that it's not measuring the same thing as before it became a target.