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

Harvard Business

The observation that many “unicorn” companies with no profits — and sometimes no revenues or even fully developed products — get valued so highly makes me skeptical of the idea that the capital market is systematically myopic. 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.