this post was submitted on 18 Sep 2023
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CEO should not be compensated in shares because they have insider information and can benefit from manipulation. It has always been a recipe for disaster.
I always thought there should be a minimum hold time. Somewhere between 1-5 years after they leave their position.
It encourages them to think long term instead of just the next quarter, and they really have to leave the company in a better place than they found it.
I fully agree with you and that sounds like a great idea. It sent me down a chain of thought that I find interesting. Say we implement this, CEO A does their job, but shortly before their time is up, they discover something awful. They are about to leave, so they want the next 1-5 years to be rosy, so they do some extremely unethical bullshit to ensure that and hide the problem just long enough for the next guy to take the fall. CEO B, who took over when A left, figures out the awful thing, but it's been long enough that they kind of have no choice but to continue the unethical bullshit, to ensure their compensation when they leave. And so on with CEO C and D. That's a feasible possibility to me and I also just realized they probably do that now, just on a shorter timescale. All in all I'd say the long term shit is probably better on the whole. Ooooor we could do something besides give one schmuck executive feudal authority over a bunch of people's livelihoods. Maybe like some kind of democratic system.
All it does is encourages stock buybacks. Too many CEOs are trash at running companies.
I feel like no executive should be able to exercise their stock options while they still work at the company.