rael ramone
Well-Known Member
I think that when you have stock as the primary compensation for CEO, that leads to issues when it's a creative company.
When you're making quaker oats, that's fine. Are you looking at his return of investment, profit and loss, and the whatnot that goes along with it. Balance sheets and other things that MBAs talk about over there three martini lunches and power suits discussing which chick they roofied that weekend… but I digress.
When you're talking a creative company like Disney, you don't get an instant return on your investment. These things take time to build. It takes time for the company to grow organically and when you have nothing but layoffs, belt-tightening, and cost increases just to make your books look better, it's not going to give you a long-term return.
Disney should be positioning itself as a long-term growth stock, something that you're going to get a good return on your investment but not for a year or two. No more of this quarter to quarter & short term ROI guano. No more being Wall Street's lapdog.
That's not the CEOs best financial interest when his compensation is based solely on the stock price. You change the compensation, and it's now about the best interests of the company from a long-term perspective.
Which is why I believe CEO's should have a mass quanity of fully priced vested shares in their portfolio - all acquired at market price according to SEC insider rules - none 'granted' as part of compensation.
Pay them an appropriate amount of compensation (in cash) in line with the entire corporate payscale. And expect them to spend some of that compensation in buying shares of said company on the open market - and hold them long term. Incentivise them supporting sustainable, long term growth built on a firm foundation.