No. of Recommendations: 5
allow executives to focus on long-term goals instead of worrying about hitting quarterly targets or prepping for earnings calls.
This is the worst excuse I an imagine, as though a CEO has to take a lot of time rehearsing to talk about his own company . A legitimate excuse might be that the 90 day exercise doesn’t really produce anything of value - except mandated conversation within shareholders (a rather worthy goal, wouldn’t you say?)
But thinking this will help change CEO behavior as far as capital investment or long term planning is ridiculous. Corporations are like ocean liners; they have momentum, it takes a lot of time to turn them around; heck, it takes a lot of time just to get them to turn 10 degrees.
A CEO ought to be paid a nominal amount, and then be able to cash in based on vested stock in 3 to 5 years, because that’s when the results of the CEO-watch will become apparent. If one of them would choose to take more “nominal wage” upfront and less “stock later”, well that would send a pretty clear signal to investors as well.
“Ho ho ho, I’m sorry our results were so crappy this quarter, I spent too much time rehearsing for this presentation and not enough, you know, running the company.”
What will they think of next?
