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Should CEO's only get paid in stock options?

Should CEO's only get paid in stock options?

Postby adamh » Mon May 06, 2013 4:45 pm

If a CEO gets paid huge bonuses to run a company into the group wouldn't stock options be a more vaulable approach. They would basically get paid by performance. If a CEO comes on board and the stock is at $3 a share and he manages the company correctly which builds the stock to $13, that's being rewards for your performance as oppose to getting multi-millions from taxpayer bailouts.

Gordan Gekko said, "Now, in the days of the free market when our country was a top industrial power, there was accountability to the stockholder. The Carnegies, the Mellons, the men that built this great industrial empire, made sure of it because it was their money at stake. Today, management has no stake in the company!"
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Should CEO's only get paid in stock options?

Postby rorry94 » Mon May 06, 2013 4:54 pm

If a CEO gets paid huge bonuses to run a company into the group wouldn't stock options be a more vaulable approach. They would basically get paid by performance. If a CEO comes on board and the stock is at $3 a share and he manages the company correctly which builds the stock to $13, that's being rewards for your performance as oppose to getting multi-millions from taxpayer bailouts.

Gordan Gekko said, "Now, in the days of the free market when our country was a top industrial power, there was accountability to the stockholder. The Carnegies, the Mellons, the men that built this great industrial empire, made sure of it because it was their money at stake. Today, management has no stake in the company!"
CEOs should get paid in pennies, and no more than can be held in one hand without dropping any.
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Should CEO's only get paid in stock options?

Postby jopie67 » Mon May 06, 2013 5:15 pm

Options have increased risk taking in many industries. CEO's tend to not care about the long term consequences of their actions to the company,they just aim to maximize their own gains in the value of their options. It has become too much like a game. Quoting a movie character doesn't do much for your credibility.
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Should CEO's only get paid in stock options?

Postby theodorus80 » Mon May 06, 2013 6:13 pm

No. Several reasons:
1. It would be hard to get CEOs to work for certain kinds of companies (i.e - penny stocks, subsidiaries, etc.)
2. It is far too easy to manipulate the stock price for short periods of time.

The current system (usually: stock options + salary + bonus) works better IMO.
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Should CEO's only get paid in stock options?

Postby stephenson » Mon May 06, 2013 6:21 pm

No, that would encourage people like Mitt Romney to buy companies, default on their pension plans and fire a bunch of people- sending the stock soaring..then sell
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