Has the runup in CEO pay created unreasonable performance expectations?
CEO pay has risen a lot, but I think it is primarily a consequence of a rising stock market. Many people wanted to see CEO compensation tied more closely to corporate performance, and they got their wish. Q: Do you sympathize with CEOs who complain of undue pressure from Wall Street for quick results? A: I think the pressure applied by the markets for short-term results is appropriate and fair. On balance, it has made companies more competitive than they would be otherwise. If executives don’t want to be subject to market forces, they should go to work for private companies or change professions. Q: Do investors who trade in and out of a stock undermine a company and its CEO? A: There have been occasions in my career where I wished we could have had two classes of shareholders. One would get a higher dividend. To get the higher dividend, investors would have to commit to not sell more than 10% of their holdings in any one month. This would save stocks from getting dumped and causing th
