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