[hellllllllooo]

I don't really see how the rules mentioned will change things that much.

> asking companies to limit executive bonuses that award short-term accomplishments.

Why would I care as an investor? I still want the stock to go up quickly. Executives own stock and without a cash bonus wouldn't this incentive trying to get quick increases in stock value.

> more disclosure to investors about meeting key milestones and plans, and reward long-term shareholders by giving them more voting power the longer they hold the stock

Seems relatively minor vs the benefits of a stock jumping significantly in a short time. As a minor stock holder I have no interest in voting power. There still isn't a downside to short term deals.

[holy_city]

>Why would I care as an investor? I still want the stock to go up quickly.

What you want to do is reinvest profit from short term gains into long term securities that beat inflation to leverage risk.

>Executives own stock and without a cash bonus wouldn't this incentive trying to get quick increases in stock value.

Equity is worthless without liquidity, and that's more important than massive growth down the road for the rank-and-file that hold options. Frankly equity isn't the motivator it used to be. If you don't plan on staying in one gig for more than 18-24 months, there is very little reason to sacrifice time and money for equity.

That said, executives' focus on short term growth to cash out is a problem in and of itself - notice how companies like Disney and Apple have skyrocketed under CEOs focused on long term stability and growth over cashing out 18-24 months after their hiring. And everyone made way more money because of it.

>As a minor stock holder I have no interest in voting power

And minor stockholders don't make a difference in the day-to-day operation of a business. The activist investors that hold board seats do, however, and their focus on short term growth has caused many mid sized shops to collapse under pressure to grow, sacrificing long term stability for their employees for the profits of vultures.

[im3w1l]

People worry that execs game the metrics investors use to evaluate stock. To give an example close to home, imagine if tech companies were evaluated by how many lines of code they produce per quarter. Now people are scared that execs will tell people to just write a bunch of whatever.

Making the company look good on paper (short term stock gains) but actually worse (perform worse in the long term as those lines don't translate to profit). But when these hidden faults are discovered the execs are long gone and their bonus checks already cashed.

[hellllllllooo]

I agree. I just don't understand how the rules described in the article actually incentive it. I get that they're small step towards it but they don't seem enough.

[eries]

https://hbr.org/2018/02/study-when-ceos-equity-is-about-to-v...

[fullshark]

I don't care about my own votes but I do care about how voting power affects decision making. It affects it in good ways (it requires accountability from leadership) and bad (short term thinking to placate investors just looking for returns).

I'm hopeful this is a happy balance, cause I find the shares without voting rights to be almost scams.

[ghufran_syed]

I think the presumption underlying the LTSE is that short-term growth is at the expense of more valuable long-term growth, so it's structured to try and encourage long-term growth. If you don't hold that view, then you won't invest in those companies.

[adrianmonk]

That certainly the goal, but I think the question being asked is whether these rule changes are sufficient to achieve it.

I do feel like that make a good point about voting power. If I own a stock, and it can go up 5% now, is the promise of additional voting power later on a valuable enough thing to make me not care about that 5%? It's possible I'm in it for the long term growth, so maybe I don't care about the 5%, but the voting power isn't the reason.

[hellllllllooo]

Exactly. To make it a long term stock market there needs to be some incentives that make it so and imo the ones stated don't seem enough to deter short term thinking. Maybe there are some other rules that aren't listed in the article.

[eries]

Stay tuned

[MandieD]

“Why would I care as an investor? I still want the stock to go up quickly.”

That is not what investors want; that’s what speculators want. I am saving for retirement in about 15-20 years; I want my investments to appreciate a reasonable amount over that period and show a stable pattern of generating good returns - I don’t really care what their prices are like in the next few months, except for that if they’re down in price for a while, I can buy more to enjoy later.

[eries]

There used to be a time in the distant past when growth companies were financed with ordinary people’s retirement savings for just this reason.

[hellllllllooo]

Sure. But how do these rules prevent speculation?