1) You can ask the CEO or CFO, “hey what’s happening to the stock price” (up or down), and they can either explain that it’s a capital offering being oversold by underwriters or they don’t know. Most of the time it is the latter only twice has it been the former.
2) Sometimes our CEO refers to what the share price could possibly do if a decision were made one way or another. Seeing as he can only speculate on what might happen, he does not really control the share price. Also, I don’t think our CEO should think this way. If it is a business decision then it needs to be made with regards to all the information and projections to the company financials, not how the stock price will react. However, I do understand that in the long run the stock price will be a result of the business performance and company financials.
3) I know if we are approaching a quarter where we are “cutting it close” to the analysts’ estimates because the CEO will start “cracking the whip”. Should our company personnel have to get these warnings? No, because they should be cracking their own whip and the CEO shouldn’t have to do this just because he wants to make projected numbers. Or if you change your guidance on earnings, your stock will be gone (whether or not it was a business performance issue, or something you could not control). Can banks control the fed funds rate? Can retail shops control consumer spending?

So that I don’t sound off too much, I will sum up the comments and your original post with:I agree that CEOs should be paid in accordance with some reasonable measure of performance. What makes up that composite is really up to the Board of Directors of each company. However, it should not be share price. If the BOD doesn’t take these steps then it is ultimately up to the sharholder’s to vote their proxies for reform and new Directors.

Last but not least, Steve Jobs and the interim-CEO of the NYSE are exceptions to the rule regarding $1 salaries, it is really not the norm. Perhaps you are saying this is a possible scenario for the CEO to paid in that manner until they perform? That would be interesting.

Analysts might have a major impact on share price in the short term, but it’s really the underlying value that guides it in the long term. And if the guy in charge sinks the company, share price will follow (mainly because analysts will spread the news about how badly the company is doing).

As far as attracting great CEOs goes, I’m not sure the companies listed above could have done much worse, so obviously big pay packages aren’t the full solution. If the performance incentives are good enough, then this shouldn’t be a problem. And I don’t think any shareholder in their right mind would complain about paying big bucks if they were getting their money’s worth.

Finally… Yes, there are some CEOs that work effectively pro bono, and only profit when the stock goes up. Steve Jobs of Apple Computer is one such example. Actually, he has a stated salary of $1/year, so it’s not truly pro bono. Since his return to the company Apple has done some great things.

Nickel, I understand what your are getting at, but how is a large company going to attract a great CEO if it can’t guarantee them pay? Are there any CEO types that will work for a company pro bono until they raise the stock price? I don’t think so.

Vote correctly with the shares of the companies you own. Only in that way you can make sure executives get a fair compensation.