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0 pointsandsoitis3y ago0 comments

If a leader makes poor decision after another, they will be penalized by the board (either in job prospects, having this job, or compensation).

Ultimately, the comp for the CEO is set by the board and that is determined by supply/demand (which inputes performance of the CEO). Penalizing someone for one mistake in anticipating the future would make a company so risk averse that returns would be very low - not a good outcome for the owners.

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snotrockets3y ago

If that leader is a founder of a company with a dual-class stock, they won't

andsoitisOP3y ago

In that case, there's a natural incentive for the leader to do things that make the business successful long-term. It is in their best interest.

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snotrockets3y ago

If that leader is a founder of a company with a dual-class stock, they won't

andsoitisOP3y ago

In that case, there's a natural incentive for the leader to do things that make the business successful long-term. It is in their best interest.

j / k navigate · click thread line to collapse