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Old 01-16-2013, 10:04 AM   #63
murraypaul
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Quote:
Originally Posted by wizwor View Post
CEOs are hired by shareholders. The boards tie compensation to stock price because they want the CEO to share their priorities.
And that worked when shareholders held stock for decades, so their interest was in the long term growth of the company.
Nowadays stocks are traded for speculation rather than investment, and all many shareholders are interested in is the greatest short-term result possible before the sell and move to something else. Those priorities are diametrically opposed to the priorities of a long-term owner.
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