More and more companies are basing larger and larger executive incentive awards on share price hurdles. The ostensible goal is to align payouts with shareholder returns, but it’s worth asking whether those payouts reflect sustainable growth and executive effort, or temporary spikes due to market factors — especially after the rise of “meme stocks” illustrated just how susceptible public companies can be to unusual (and unsustainable) trading patterns.
In Meme Stocks & Share Price Metrics: Reexamining the Value Proposition in Executive Incentives, analyst Oren Lida takes a close look at the intersection of these two trends, including a case study on BlackBerry Limited, and what it all means for shareholders, boards and management of public companies, and other stakeholders involved in executive pay.
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