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Do CEOs have enough skin in the game?

Joseph McCafferty | October 3, 2017

For most medium and large public U.S. companies, share ownership guidelines and stock holding requirements have become a tick-the-box exercise. They ask their CEOs to retain five times their base pay in company stock, give them five years to get there, disclose the practice on their proxy statement, and forget about it.

A push may be coming, however, to re-examine the effectiveness of such plans and consider increasing the amount of company stock CEOs are required to hold. In the United Kingdom, for example, stock ownership guidelines and holding periods are becoming hot issues, with shareholders asking CEOs, other senior executives, and board members, to hold more stock and for longer periods of time.

Indeed, changes to stock ownership guidelines for CEOs and other executives were the top governance improvements in the United Kingdom among FTE 350 companies during the first half of 2017,...

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