Editing Shareholder value (section)

=== Executive compensation ===
{{Main|Executive compensation}}
In order to facilitate an incentive structure that supports shareholder value, the method of executive compensation has changed toward making a large portion of [[C-suite]] pay come from stock. The reasoning behind this decision was that it would bring the interests of CEOs in line with those of shareholders.<ref name=":2">{{Cite web|last=Denning|first=Steve|title=Making Sense Of Shareholder Value: 'The World's Dumbest Idea'|url=https://www.forbes.com/sites/stevedenning/2017/07/17/making-sense-of-shareholder-value-the-worlds-dumbest-idea/|access-date=2020-12-18|website=Forbes|language=en}}</ref> As a result of this decision, executive compensation has skyrocketed, quadrupling from the rate of compensation in the early 1970s.<ref name=":3">{{Citation|last=Yang|first=Jia|title=Maximizing Shareholder Value: The Goal that Changed Corporate America|date=2014-12-31|url=http://dx.doi.org/10.7312/star17015-011|work=The Best Business Writing 2014|pages=160–170|publisher=Columbia University Press|doi=10.7312/star17015-011|isbn=978-0-231-53917-3|access-date=2020-12-18|url-access=subscription}}</ref> This change has also shifted the motivations of C-suite managers in the direction of increasing share price over everything else, leaving other goals like long-term growth and stakeholders like employees and customers behind.<ref name=":4">{{Cite journal|last=Kennedy|first=Allan|date=2000|title=The end of shareholder value|journal=RSA Journal|volume=148|pages=50–53}}</ref> [[Share repurchase|Share repurchasing]] might cause [[Incentive#Misaligned incentives|misaligned incentives]] between [[market capitalization]] and executive compensation connected to [[share price]] due to the change in number of shares.<ref name="o679">{{cite journal | last=Shilon | first=Nitzan | title=Stock Buybacks as an Executive Compensation Problem | journal=SSRN Electronic Journal | publisher=Elsevier BV | year=2020 | issn=1556-5068 | doi=10.2139/ssrn.3541993 | page=}}</ref>