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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,” quote by Michael Farmer
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““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,””

Michael Farmer

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.

Key Takeaway

Align incentives with sustainable growth.

Themes

finance ethics leadership short‑termism corporate culture

Mood

critical analytical

Type

business ethical

When to use this quote

  • quarterly reporting
  • investment decisions
  • strategic planning
  • risk management
  • employee morale

Key Concepts

stock‑based compensation shareholder value executive behavior

Questions to Reflect On

  • Should compensation reflect broader performance?
  • How to balance shareholder and stakeholder interests?
A Different Perspective

Short‑term focus can harm innovation and employee welfare.

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