When a rising stock price can hide trouble in the company
A focus on stock price can mask a longer- term decline in a firm's financial footing
Wed, Oct 16, 2013 - 6:00 AM
'Value myth': Bernard Ebbers of WorldCom. The case demonstrated clearly that a higher stock price does not always reflect real economic value. - PHOTO: BLOOMBERG
[NEW YORK] When a company receives criticism about its executive pay practices, a typical defence is to cite a rising stock price as justification of its pay. If total shareholder return is up, the theory goes, stockholders have no right to complain about what might otherwise look like outsize...