You hear a lot about CEOs making scandalous bonuses in stock but I was under the impression that they can’t sell massive quantities of stock all at once otherwise the price might drop. I also hear they can get loans using stock as collateral but don’t those loans need to be paid back? Also, apparently hardly anyone pays dividends anymore. Does this money “exist”? Can they purchase stuff worth millions of dollars? Or are they actually cash poor?
In: Economics
I’ll question your assertion that “hardly anyone pays dividends anymore”, I literally just received a dividend yesterday from my corporate stock, and will continue to receive them quarterly… That’s kinda the point, as part owner of the company, I’m entitled to a part of the profits.
It’s true that CEOs can’t sell off stock easily, they typically have to declare sales in advance to avoid things like insider trading or causing an uproar on the market. But that’s not to say they can’t sell large volumes of stock, they can earn millions of dollars from stock sales in a go, but they just need to forecast it.
Options are also a big piece, as u/Lithuim explained below. It’s essentially a free bonus.
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