More CEO Stock Means Better Returns For All

What's the best way to improve a company's long-term performance? Increase the stock that the CEO owns. A study by Watson Wyatt Worldwide consulting found that the five-year total return to shareholders at companies where CEOs owned an average $8.1 million in stock was 28% compared to an average return of 19% at all companies. At companies where CEO stock ownership averaged $4.5 million, total return to shareholders over the five-year time frame of 1993 to 1997 was 13%.

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