Executive relief
Article Abstract:
US companies are increasingly buying back their own stocks, which helps stock prices rise. Cynics might argue that the decisions to buy back stocks are taken by senior managers who have stock options, and benefit from seeing these rise in value. Such a view is reinforced by the increased usage of derivatives allowing companies to protect themselves against a fall in the value of their companies' stocks. This undermines the given aim of stock options to provide an incentive to managers to push up companies' stock prices.
Publication Name: The Economist (UK)
Subject: Business, international
ISSN: 0013-0613
Year: 1999
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Profitless gamble
Article Abstract:
A number of non-high-tech companies have seen drops in their stock prices, and this includes Procter and Gamble (P and G) after a profit warning on Mar 7 2000. P and G announced a drop in profit, but Ford and Rolls-Royce havs seen stock price falls despite announcing profit rises. Old-economy stocks have been especially badly hit in Britain, and new capitalizations have been reflected in changes to the FTSE 100 index. The fall in stock prices in these companies is seen as a demotivating factor for executives.
Publication Name: The Economist (UK)
Subject: Business, international
ISSN: 0013-0613
Year: 2000
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