35 votes

What stops management from just "compensating" themselves by taking all the stock in a company?

Answer: the board. The board oversees the operations of the company and essentially supervises the CEO. The amount of actual supervision that takes place varies by company. While I cannot comment on ...
  • 75.2k
19 votes
Accepted

Why did accelerated vesting apply to the CEO but not regular employees of Twitter?

Based on news reports, this was a "golden parachute" within his contract that accelerated his equity awards if he were terminated within 12 months of a "change of control". It's ...
  • 122k
15 votes

What stops management from just "compensating" themselves by taking all the stock in a company?

This may vary according to the jurisdiction the company is incorporated in, but in the one I'm somewhat familiar with (Denmark), neither the CEO nor the entire board can validly issue an unlimited ...
12 votes

What stops management from just "compensating" themselves by taking all the stock in a company?

You might enjoy reading the book "Pay without Performance: The Unfulfilled Promise of Executive Compensation" The theoretical limit on what executives are paid comes from "arm's length bargaining" ...
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7 votes

What stops management from just "compensating" themselves by taking all the stock in a company?

The first line of defense against the CEO doing this is other board members; the CEo can't actually do anything without approval from the board of directors. But you ask "What stops management from ...
6 votes

What stops management from just "compensating" themselves by taking all the stock in a company?

There are two different issues here1: Creation of new shares: the company uses them to raise capital. Theoretically they do not affect the value of current stockholders assets. If you have a $1,000,...
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