Comment by ljhsiung

While I definitely agree CEO pay is quite egregious, in theory, to mitigate short-sighted quarterly earnings hyperoptimization, couldn't a board simply tie equity incentives to performance targets and timeframes though?

Lip Bu Tan, for instance, has performance targets on a five year timeline, which are all negated if the stock falls below a certain threshhold in 3 years. [1]

Or, ever controversial Elon Musk, certainly has an (also egregious) $1 Trillion dollar pay package, but it has some pretty extreme goals over 10 years, such as shipping 1 million Optimus robots [2].

All in all, we can debate about the Goodharting of these metrics (as Musk is keen to do), but I feel boards of these public companies are trying to make more long-term plans, or at least moving away from tying goals to pure quarterly metrics. Perhaps we can argue about the execution of them.

Note: I own neither of these stocks and my only vested interest is buying the S&P.

[1] https://www.cnbc.com/2025/03/14/new-intel-ceo-lip-bu-tan-to-... [2] https://www.bbc.com/news/articles/cwyk6kvyxvzo