Stocks Crossing The 13 Week Moving Average <$10.01 Message Board

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Strategies & Market Trends : Stocks Crossing The 13 Week Moving Average <$10.01

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To: WhatsUpWithThat who wrote (12771)	9/25/2003 2:44:56 PM
From: James Strauss	of 13094

For eg, saw a note today that a new CEO had a 9.2mm loan to buy 5% of the OS stock of the company. The loan would be forgiven if the company were sold for > 20 (about 100% up from where it was) or traded over 30 for a specific time period. Problem with that is, isn't that CEO now biased to find reasons not to take a 17 or 18 buyout even if in fact it's in the best interests of the company? 9.2mm is a big temptation... Exec compensation is v tricky; hard to design something that can't be manipulated. WUWT: The story you cite would present a conflict of interest unless the Board felt that the intrinsic value was greater than current book value... It could also be argued that $20.00 or $30.00 a share is more in the best interests of the company and its shareholders than $17.00 or $18.00 a share... In this instance the intrinsic value of the company would have to be measured by any agency or group opposing the turndown of a lower price... Also, an independent group may also do its own analysis... Jim

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