Question

Too often, executives are focused on short term metrics, such as quarterly reports. So executives may...

Too often, executives are focused on short term metrics, such as quarterly reports. So executives may get pay in the form of long-term incentives, often tied to share price in the future, to encourage longer term focus. Do executives do things that are good for the share price but ultimately unethical or just bad for the company? Give examples.

Business   Operations-Management   
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Yes executives sometime tamper with the results of the company so that the share price will be increased helping them get long term incentives. For example we have seen many cases where wrong results are given by the executives like sales data so that the share of the company rises. But this turned out to be a big problem for the company during audit. Hence executives need to be stopped from doing such things just for their appraisals. We have also seen executives making false promises to customers regarding specifications of the product so that the customer takes the product and hence the sales increases and they get incentives. But this is also problematic for the company in future.

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