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
They have stock options and all that is true, BUT
Most CEOs bonus structure is tied to the stock price. If they meet their stock goals they are given millions of dollars. They are then incentivized to do things like stock buy backs.
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