Paying CEO’s most of their compensation in stock was a theoretically sound idea when it was made— after all, shouldn’t their pay be linked to performance?— but one that should be abandoned now that the empirical results have shown what it mess it has really been. It encourages tax and stock shenanigans like this in favor of real investment, further prioritizes short-term thinking, and is just generally useless since there connection between CEO performance and stock price has been shown to be tenuous even without the manipulation.

Let’s go back to paying CEO’s purely in cash with an annual performance bonus decided by the board.