Investing Quote by Michael Farmer
““The obsession with quarterly earnings came about because personal compensation was increasingly tied to what happened to the share price. Improving market capitalization became the number one job for senior executives. Success would lead to personal wealth. Sadly,””
About This Quote
Source Book: The Wealth of Nations Reimagined, 2015
Executive pay tied to stock price pushes leaders to prioritize short‑term market gains over long‑term health, distorting corporate purpose.
In simple terms: Compensation drives focus on share price.
Align incentives with sustainable growth.
Themes
Mood
Type
When to use this quote
- quarterly reporting
- investment decisions
- strategic planning
- risk management
- employee morale
Key Concepts
Questions to Reflect On
- Should compensation reflect broader performance?
- How to balance shareholder and stakeholder interests?
Short‑term focus can harm innovation and employee welfare.