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Do you count stock options when counting shares of stock owned by managers of the company?
Wiki User
∙ 11y ago
they are usually accounted for separately because they are not entirely exerciseable at that current time...this means that they will be able to be purchased at usually a much reduced price at a later time, but have no voting value now because they cannot be exercised until a later specified time.
Wiki User
∙ 11y ago
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Should the managers of company own sizable amounts of common stock in the company what are the pros and cons?
There is a major PRO to managers owning a stake in the company - their performance is tied up to their pay! If the managers are working properly, the company will be doing well and manager's shares will increase in value - the company is happy, the manager is happy and the general shareholder is happy.
What are some mechanisn that encourage manager to act in the best interests of stockholder?
Four primary mechanisms are used to motivate managers to act in stockholders' best interests:Managerial compensationDirect intervention by stockholdersThreat of firingThreat of takeovers1.Managerial CompensationManagerial compensation should be constructed not only to retain competent managers, but to align managers' interests with those of stockholders as much as possible.This is typically done with an annual salary plus performance bonuses and company shares.Company shares are typically distributed to managers either as: Performance shares, where managers will receive a certain number shares based on the company's performance.Executive stock options, which allow the manager to purchase shares at a future date and price. With the use of stock options, managers are aligned closer to the interest of the stockholders as they themselves will be stockholders.2.Direct Intervention by StockholdersToday, the majority of a company's stock is owned by large institutional investors, such as mutual funds and pensions. As such, these large institutional stockholders have the ability to exert influence on mangers and, as a result, the firm's operations.3.Threat of FiringIf stockholders are unhappy with current management, they can encourage the existing board of directors to change the existing management, or stockholders may even re-elect a new board of directors that will accomplish the task.4.Threat of TakeoversIf a stock price deteriorates because of management's inability to run the company effectively, competitors or stockholders may take a controlling interest in the company and bring in their own managers.
Are the results of evaluations communicated to managers and to employees?
If the evaluation is for the business itself them the results will be shares with the managers and all of the employees. Of the evaluation is to evaluate each employees work then it will only be shared with the managers.
What are the forces that causes the managers to act in the interest of the shareholders?
There are many forces which will tend to create a convergence between the interests of stockholders and managers, and thus cause managers to be interested in maximizing a corporation's profits or value: a. Competitive pressures could lead to stock price declines for nonperforming company, and again result in take overs, proxy contest, etc. b. In many corporations, management remunerations are tied to the performance and managers frequently are awarded stock options which gain value as the price of shares rises. Thus, managers will have an interest in maximizing stockholder welfare. c. Corporate shares are not only owned by widely dispersed stockholders but by large institutional holders such as: banks, insurance companies, mutual funds, pension funds, etc. These organizations employ analysts who continually study stock performance. Nonperforming companies would be sold from these institutions' portfolios, and lead to decreased prices of these stocks. This could lead to the dismissal of present management.
What is the difference between a subsidiary company n a holding company?
A subsidiary is an 'off-shoot' or 'child' of an existing company, either partly or fully owned by the 'mother' company doing mostly similar or complementary businesses, e.g., a travel services subsidiary of a big bank (the bank's executives travel so much it makes sense to have a self-owned company serve its needs). A holding company holds the shares of stock, or shares of ownership of other companies, usually but not always controlling shares (enough shares to exert control of the companies). If you own shares of stocks in a holding company, you are essentially owning a part of many different companies and are trusting the holding company's management to handle the proportions for you. A subsidiary is the down result of a business idea. A holding company is the up result of a business idea.
Should the managers of company own sizable amounts of common stock in the company what are the pros and cons?
There is a major PRO to managers owning a stake in the company - their performance is tied up to their pay! If the managers are working properly, the company will be doing well and manager's shares will increase in value - the company is happy, the manager is happy and the general shareholder is happy.
Should the managers of a comlpany own sizable amounts of common stock in the company what are the pros and cons?
There is a major PRO to managers owning a stake in the company - their performance is tied up to their pay! If the managers are working properly, the company will be doing well and manager's shares will increase in value - the company is happy, the manager is happy and the general shareholder is happy.
Who are the share holders of Lukoil?
Company's top managers Vagit Alekperov and Leonid Fedun control about a quarter of Lukoil shares while about 20% is owned by ConocoPhillips. The rest of shares is a free float.
What are some mechanisn that encourage manager to act in the best interests of stockholder?
Four primary mechanisms are used to motivate managers to act in stockholders' best interests:Managerial compensationDirect intervention by stockholdersThreat of firingThreat of takeovers1.Managerial CompensationManagerial compensation should be constructed not only to retain competent managers, but to align managers' interests with those of stockholders as much as possible.This is typically done with an annual salary plus performance bonuses and company shares.Company shares are typically distributed to managers either as: Performance shares, where managers will receive a certain number shares based on the company's performance.Executive stock options, which allow the manager to purchase shares at a future date and price. With the use of stock options, managers are aligned closer to the interest of the stockholders as they themselves will be stockholders.2.Direct Intervention by StockholdersToday, the majority of a company's stock is owned by large institutional investors, such as mutual funds and pensions. As such, these large institutional stockholders have the ability to exert influence on mangers and, as a result, the firm's operations.3.Threat of FiringIf stockholders are unhappy with current management, they can encourage the existing board of directors to change the existing management, or stockholders may even re-elect a new board of directors that will accomplish the task.4.Threat of TakeoversIf a stock price deteriorates because of management's inability to run the company effectively, competitors or stockholders may take a controlling interest in the company and bring in their own managers.
What is a market maker?
Market makers- These are investment banks (eg Goldman Sachs) that partake in IPO's (initial public offerings) An IPO is done when a private company wants to 'go public', they ask investors and fund managers to buy shares in a company, when the company has fully, or nearly fully sold out then they launch the company on to the stock market. Another aspect market makers do is to generate more equity in a company, they do this buy issuing more shares in a company, effectively diluting the value of the other shares. In order to stop existing shareholders being annoyed by the decreased value of their holding they offer them the right to buy the shares (take up their rights) or to receive free shares to compensate them.Stockbrokers- Buy and Sell shares on behalf of investors. They can control the price of companies by waiting and mass buying or selling shares which can effect the price drastically.Fund Managers- these include unit trust, OEIC (open ended investment companies), Hedge Funds and Investment Trust managers. They manage trillions of assets on behalf of investors and in extreme circumstances can cause the rise or fall of a company in a matter of hours.
Who is a market maker?
Market makers- These are investment banks (eg Goldman Sachs) that partake in IPO's (initial public offerings) An IPO is done when a private company wants to 'go public', they ask investors and fund managers to buy shares in a company, when the company has fully, or nearly fully sold out then they launch the company on to the stock market. Another aspect market makers do is to generate more equity in a company, they do this buy issuing more shares in a company, effectively diluting the value of the other shares. In order to stop existing shareholders being annoyed by the decreased value of their holding they offer them the right to buy the shares (take up their rights) or to receive free shares to compensate them.Stockbrokers- Buy and Sell shares on behalf of investors. They can control the price of companies by waiting and mass buying or selling shares which can effect the price drastically.Fund Managers- these include unit trust, OEIC (open ended investment companies), Hedge Funds and Investment Trust managers. They manage trillions of assets on behalf of investors and in extreme circumstances can cause the rise or fall of a company in a matter of hours.
How much stock option does a COO get?
It depends on the contract the COO has made with the employing company. There is no law that says "A COO gets options on 100,000 shares of stock." The company might not issue stock, might not have stock options, might not use options to pay its executives...
Do market shares burden the company?
Market Shares depend upon the company prices. If market down then company shares will be down. Then its true that market shares is always burden for the company.
What is the ticker symbol for the Golden Corral?
Golden Corral does not trade stocks to the public, the only people that can buy shares into Golden Corral are the managers and higher-end employees of the company.
What is the position of an applicant for shares bofore allotment and after allotment of shares?
Before allotment of shares position is Applicant. He doesnt owner of the company. He do not have any rights on company profits and he is not liable for company liabilities. After allotment of shares he become Share Holder. He has right to get company profits. He is the owner of company. He is liable of company liabilites to the extent of his shares.
How many shares of stock does a company have?
A company does not have a definite number of shares of stock. The company can choose to split the number of shares into any ratio with prior announcement.
What is a person who owns shares in a company called?
A person owning shares in a company is a shareholder.
