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Is Corporate Short-Termism Really a Problem? The Jury’s Still Out

Harvard Business

It is also the case that the companies generating the highest immediate cash flows, which should be overvalued on the myopia theory, historically have had the highest stock market returns , implying undervaluation rather than overvaluation. McKinsey tries to address this issue by doing comparisons within industries.

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How Incentives for Long-Term Management Backfire

Harvard Business

With the best of intentions, many proxy advisors and long-term investors have widely blessed three years as appropriate, adopting three-year pay for performance as their standard comparison. The board chose earnings per share (among other financial metrics) to measure and reward executives for long-term performance.