eli5 if most company’s ceo are payed in stocks, what’s preventing them from literally doing insider trading
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Nearly always, insiders like this are not allowed to trade their own company stocks like a regular person would.There are large amounts of regulations around this
Generally you can only trade during certain specific times, (such as only say within 2 weeks after releasing an earnings report) so that any insider information you have is either out of date, or already public. Or you might have to do all trades in advance say, a quarter in advance. Additionally, many people simply won’t control their own stock investments, and they are handled by a independent third party, with no insider knowledge and the CEO doesn’t tell them what to do.
People who are really wealthy or get a lot of stock generally have no control over it and instead its all managed by an independent investment manager.
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