It’s not really punishment if you don’t care what your share price is. A lower share price doesn’t hurt a company unless perhaps they are trying to do a secondary offering or something.
It does, however, hurt the Wall Street investors. If they have enough power to do so, they will replace the CEO if a share price is too low for too long.
That’s what creates the short term incentive that is a trouble and a lot of public companies. If the CEO has control of the voting shares, that pressure is relieved.
It does, however, hurt the Wall Street investors. If they have enough power to do so, they will replace the CEO if a share price is too low for too long.
That’s what creates the short term incentive that is a trouble and a lot of public companies. If the CEO has control of the voting shares, that pressure is relieved.