1. Fixing the Market: The Real Reason to Worry About Obscenely High Executive Pay

    Fixing the Market: The Real Reason to Worry About Obscenely High Executive Pay

    Executive compensation in the U.S. is usually discussed in moral terms. It’s not fair that chief executive officers are paid up to $156 million a year, the argument goes. But those outsized pay packages, in the form of stock-based compensation, are financed by shareholders, who suffer a loss in earnings per share and ownership of the company. And because CEOs are paid mostly in stock, they tend to obsess over the share price, training them to focus on short-term company gains...

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    1. Basing compensation on a stock price is creating incentives to increase the stock price and not necessarily the business fundamentals behind it.
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