From my little understanding, company’s issues stocks to raise money. So once the company’s sell those stocks, why does it stock prices matter to them?
In: Economics
The theory is that you give stock to employees and company managers to align their interests with shareholders. Because now the employees have skin in the game and will work harder to increase the share price through better company performance.
But yes there are also downsides when you do this because it incentivizes unscrupulous executives to cook the books to juice up the stock price.
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