How To Know If The Management Is Aligned With The Shareholders
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Transcript of How To Know If The Management Is Aligned With The Shareholders
Assessing Management How To
Tell If The CEOs & Directors Are Align To Shareholders
“Does The Company Have A Management of UNQUESTIONABLE Integrity…”
~ Philip Fisher
Being a CEO Doesn’t Automatically Justify
The Right To A High Pay
A CEO Still HasA Job To Do
A CEO Must Be Able ToDeliver… Bringing The
CompanyTo New Heights & Generate
Healthy Profits To The Company
As An Investor, Would You Want To Put Your Money
With A Company That Doesn’t Perform But Pays It’s Directors Millions Of
Dollars In Remuneration ?
A Good Management,Doesn’t Just Settle For Track Records Or Fill Their Pockets
With Cold Hard Cash…
But Rather…Focusing What They Are Meant To Do As A CEO…
To Deliver
Only Then Will Their Remuneration Be Fully Justified & Leave A True
Legacy In TheirFuture Endeavors
So… One Of The ThingsWhen It Comes To Assessing
Management… To Know IfThey Are On Your Side
Is The Way TheyAre Being Compensated
For The Job
So Here Are 2 Things To NoteWhen It Comes To Assessing
If The Management Are Overpaid
First, Is Their Compensation Tied To How The Company
Has Performed ?
If The Company Is not Performing, Is The
ManagementWilling To Cut Down On Their
Own Pocket ?
Obviously, As An Investor, You Rather Invest In A CEO That Pays Himself A Million
While Generating $10 Million For The Company
Than One That Pays Himself A Million When Company Is
Not Generating Any Profits…
It Tells You A Lot About ThatPerson – If He Is In This For Himself Or The Company.
Second: Is The Management Granting Themselves With Excessive Stock Options ?
Salaries & Bonuses Are Not The Only Way The
Management Gets Paid. They Can Be Awarded Stock
Options As Well.
If management are awarding themselves excessive
amounts of stock options compared to the results and
the performance of the company…
It is something you need to sit up and take notice of.
When these stock options are exercised, new shares are issued and dilutes the
value of outstanding shares
When analyzing, take a look at the number of stock
options as a percentage against the number of
outstanding shares
You’d much prefer a company that has small
percentage versus a company that has issued
stock options worth 10% of outstanding shares
In A Nutshell...
Any behavior that shows that management is more
interested in being rewarded handsomely regardless is a telltale sign that they put
their self-interests over their shareholders
We’ll Try To Avoid ThemAt All Cost…
Full Step-By-Step Case Study On How We Discovered, Evaluate & Sold This Stock For A 243.5% Return In 18 Months
Questions?Feel free to reach out to us…
Website: http://www.fifthperson.com