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I am a beginner in the stock market game, and just have a quick question. How do CEOs get paid? Most do not get paid in a traditional salary sense, but get paid with stock. However, how do people that are paid in stock get money? The only thing I know of is selling the stock, which people like Bill Gates, Warren Buffet, etc. do not do. So, how do these people get money?
Actually most CEOs get paid in both, with the primary portion of income coming from stock options. Your best bet would be to look at Yahoo Finance then they have a section within the company page called Insider Transactions. You can check out there and it will answer almost all of your questions.
edit: Just looked at BRK-A: Insider Transactions for BERKSHIRE HATH HLD A - Yahoo! Finance and noticed that Warren also had sales, but they're called dispositions. Investopedia defines it as another term for a sale of stock, but on the insider transactions it has it sold at $0 per share for any of Warren's transactions. Anyone else care to expand on that for me?
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Brett Lucas
Last edited by llamagatekeeper; 12-30-07 at 09:27 PM.
Reason: BRK-A update
The board of director needs to strike a balance between cash compensation and stock compensation. Too much cash compensation will not motivate the CEO to drive up earnings, which consequently will drive the stock price. (Good for us, investors). Too much stock compensation and the CEO may try to manipulate short term results in order to pump up the stock price. Since most average CEO do not stay in the same company for long, this may not be good for investors.
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