The CEO Trend – Investors Are Turning On What Makes A Company A Good Investment
Chief executive officers, they’re the top of the top, and for the last decade they’ve been treated like kings. You can’t fire them, the board won’t toss ‘em and they’re living it up at the expense of the investor. But now it feels like investors are demanding more from the corporate elite. After a year of scandals and bonuses, investors are going to start wanting more out of their CEOs.
Its a shift that needed to happen.
For ages investors have cared about who manages their money at a brokerage firm, who’s in charge of their mutual fund holdings and now even exchange traded funds; but no one has really taken a hardline stance on the upper management of most businesses.
There is no better time than right now to start paying attention to who’s guiding a firm that you own a part of. As a shareholder you should demand answers, demand a board of directors and CEO who want to build a business rather than their own personal bankroll.
I’m going on the record right now in saying that I think the next big wave in funds and in exchange-traded funds will be new socially-responsible investments, not in green technologies but focusing on corporate salaries.
Now that the most basic supplement to organic growth (economic expansion) is gone, its going to take a lot from corporate leaders to generate profits and growth. CEOs are going to have to work harder, and we as investors need to communicate that same message to Wall Street.
CEOs are employees of the stockholder, they aren’t the kings of Wall Street.
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I agree the CEO pay has gotten way out of hand. They should be paid well. And were in the 1960’s. Now they act like the company is their personal bank account. The abuses today are so large it isn’t about cutting back by 20%. It is often a matter of pay being 500%-1,000% too high for the CEO. And plenty of other people have gotten into the grabbing money they don’t deserve game (just look at all the bailout bonus babies - not just those paid with taxpayer money but those that took money from corporations in the past several years that then needed huge bailouts).
http://management.curiouscatblog.net/2009/04/06/another-year-of-ceos-taking-hugely-excessive-pay/
http://curiouscat.com/management/sevendeadlydiseases.cfm