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by gohrt
3914 days ago
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From the article: > If Clinton really wants to deal with short-termism, she’d be better off targeting the way executive compensation works, instead of the way capital gains are taxed. Ultimately, the solution to short-termism isn’t on Wall Street. It’s in the executive suite. So my GGP's post is correct. Executives break companies by manipulating the financial short-term. Saying "Amazon and Netflix and Tesla prove that the market is long-terminal" is silly. These companies are founder-run and there is a large part of the market (Hello Yahoo and HP) where revolving door CEOs just pillage the company to goose the short term numbers and cash out their stock options) |
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"a 2014 study of companies that cut R. & D. spending in order to meet short-term earnings goals found that their stocks underperformed after earnings had been announced—hardly what you’d expect if the market cared only about the short term."
meaning the market is not being fooled, and therefore executive compensation based on market value is not driving short term thinking.