Who wrote about stock options to disincentivize self-dealing?
February 15, 2018 6:21 PM   Subscribe

Blame Iacocca discusses some of it, but I thought I read a piece (possibly also by Surowiecki) in the New Yorker's Financial Page with more historical context.

I might be mashing together the details of a few stories, but the way I remember it, it started with the Cereal Wars between Post and Kellogs in Battle Creek, MI. Cereal companies were growing so fast that they couldn't afford capital expenditures under the traditional business structures of sole proprietorships and partnerships where the owners ran the company. Issuing stock started and companies were run by "professional managers" who were supposed to run them for the benefit of shareholders. Instead, embezzling and self-dealing were so rampant that the managers were given stock options so their interests were better aligned with shareholders. Huge salaries would also make stealing from the company less attractive.

I'm a New Yorker subscriber, so if that's where it was, I can get through the paywall to the archives.
posted by ASCII Costanza head to Media & Arts (1 answer total) 2 users marked this as a favorite
 
I've concluded I did mix up some stories. Blame Iacocca is the most succinct drawing-together, but I think I must have made my own miso-mash out of the New Yorker stories.
posted by ASCII Costanza head at 7:40 PM on August 5, 2018


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