Does giving CEO's Stock Options cost jobs?
- Thread starter ZZman
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Oh! Very interesting premise!
Stock option or bonus would be the same, they would cut jobs when it doesn't make sense to keep them. The only difference is they would worry more about stock price or whatever goal they set it at, and when they can exercise the stock vs when they get the cash and pocket it.
You can get VERY RICH with option if the price goes up, but you can also end up with nothing if it goes under water. Bonus with cash, not so much.
You can get VERY RICH with option if the price goes up, but you can also end up with nothing if it goes under water. Bonus with cash, not so much.
a ceo does very little.. merely a figure head for a company, gives big speeches that nobody cares about and makes hoards of money, literally siphoning money from a company.
They should be paid an hourly wage like they pay their workers.
They should be paid an hourly wage like they pay their workers.
be careful, you've been drinking the kool aid.
Originally Posted By: ZZman
Would they be less likely to cut jobs if they were paid a straight salary only?
Does the fact that they get stock cause them to do whatever it takes to get the stock price as high as possible?
The CEO-s do not have any duty to preserve jobs. They have a fiduciary duty to the owners of the corporation to maximize their value. Sometimes maximizing that value involves layoffs.
The stock options are a tool to make sure the CEO-s have skin in the game and by maximizing the value of their stock options, they maximize those of the shareholders, too. That means that it is beneficial for a company to grant stock options to the management and employees.
But, as always, there are unintended consequences and sometimes what is good for one corporation is not good for the society. That's why we have a government to make sure that while individual corporations prosper, the society does not suffer as a whole.
Would they be less likely to cut jobs if they were paid a straight salary only?
Does the fact that they get stock cause them to do whatever it takes to get the stock price as high as possible?
The CEO-s do not have any duty to preserve jobs. They have a fiduciary duty to the owners of the corporation to maximize their value. Sometimes maximizing that value involves layoffs.
The stock options are a tool to make sure the CEO-s have skin in the game and by maximizing the value of their stock options, they maximize those of the shareholders, too. That means that it is beneficial for a company to grant stock options to the management and employees.
But, as always, there are unintended consequences and sometimes what is good for one corporation is not good for the society. That's why we have a government to make sure that while individual corporations prosper, the society does not suffer as a whole.
No. No more than 'speculators' raise the price of oil.
I know it comes as a shock to many that corporations are in business to make money for their stockholders and officers...and 'not' to take care of workers.
ZZman you have a lot of time on your hands. Do you have a government 'job'????
Originally Posted By: EricF
a ceo does very little.. merely a figure head for a company, gives big speeches that nobody cares about and makes hoards of money, literally siphoning money from a company.
They should be paid an hourly wage like they pay their workers.
Really? So you could do the same thing for Ford that Alan Mulally has done? You'd be capable of having the long term vision to guide a company and position it to be successful in the next 3 years? 5 years? You have the skills to do what someone like Ken Iverson did for Nucor? Take a company ready for bankruptcy and turn it into a multi-billion dollar corporation?
Simply from the tone of your post I highly doubt that you have the skills it takes to run a successful company.
Originally Posted By: zzman
Would they be less likely to cut jobs if they were paid a straight salary only?
Does the fact that they get stock cause them to do whatever it takes to get the stock price as high as possible?
High stock prices and profit are a good thing for those of us that invest. And every employee with a 401K or mutual fund is an investor in the stock market, so there is a significant obligation to keep profits as high as possible.
It's not a perfect world, but it works for people willing to work hard and keep their skills up to date.
a ceo does very little.. merely a figure head for a company, gives big speeches that nobody cares about and makes hoards of money, literally siphoning money from a company.
They should be paid an hourly wage like they pay their workers.
Really? So you could do the same thing for Ford that Alan Mulally has done? You'd be capable of having the long term vision to guide a company and position it to be successful in the next 3 years? 5 years? You have the skills to do what someone like Ken Iverson did for Nucor? Take a company ready for bankruptcy and turn it into a multi-billion dollar corporation?
Simply from the tone of your post I highly doubt that you have the skills it takes to run a successful company.
Originally Posted By: zzman
Would they be less likely to cut jobs if they were paid a straight salary only?
Does the fact that they get stock cause them to do whatever it takes to get the stock price as high as possible?
High stock prices and profit are a good thing for those of us that invest. And every employee with a 401K or mutual fund is an investor in the stock market, so there is a significant obligation to keep profits as high as possible.
It's not a perfect world, but it works for people willing to work hard and keep their skills up to date.
Originally Posted By: ZZman
Not at all.....But how much money is enough?
I'd say everyone wants double of what they are making, and when they make that, they want to double that again...
Not at all.....But how much money is enough?
I'd say everyone wants double of what they are making, and when they make that, they want to double that again...
Originally Posted By: rshaw125
ZZman you have a lot of time on your hands. Do you have a government 'job'????
We all have time on our hands. I could watch TV alot more but this is more fun and stimulating.
And yes I do have a government job.
Does that matter or make me lazy? Am I a leech?
I work, I pay taxes. I have worked 2 jobs. I have worked since I was old enough to be allowed to work.
ZZman you have a lot of time on your hands. Do you have a government 'job'????
We all have time on our hands. I could watch TV alot more but this is more fun and stimulating.
And yes I do have a government job.
Does that matter or make me lazy? Am I a leech?
I work, I pay taxes. I have worked 2 jobs. I have worked since I was old enough to be allowed to work.
Originally Posted By: ZZman
Would they be less likely to cut jobs if they were paid a straight salary only?
Does the fact that they get stock cause them to do whatever it takes to get the stock price as high as possible?
Government policy is one reason stock options are now more prevalent:
http://www.businessweek.com/magazine/content/06_48/b4011079.htm
Note that policy did nothing to curb evil CEO pay.
Would they be less likely to cut jobs if they were paid a straight salary only?
Does the fact that they get stock cause them to do whatever it takes to get the stock price as high as possible?
Government policy is one reason stock options are now more prevalent:
http://www.businessweek.com/magazine/content/06_48/b4011079.htm
Note that policy did nothing to curb evil CEO pay.
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