Why are CEOs so focused on stock prices?
Hi, As far as I know a lot of CEOs are very focused on the stock price of their company. Is there a specific reason for this apart from them wanting to push their ego and their comp? Does it carry any real benefit for the firm?
Their pay and job security is determined mostly by stock price - if stock price goes up they make a ton of money on options, if it goes down for a prolonged period they’ll eventually get fired
Also affects ability to do future capital raises through SEO.
Higher stock price -> higher valuation -> less dilution for given $X of capital raised
Nah nobody gives a shit about that, as the other said it's because of stock options
Total shareholder return is usually one of the targets set by RemCos
1. the bulk of CEO pay is in stock options
2. they have a board of directors constantly breathing down their neck to get the stock price up
Idk maybe because it's like, their job?
In public companies, there is a Board, which represents the owners of the company, and which hires a CEO, whose job is to grow shareholder's value through capital appreciation and dividends/share buybacks
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