Buzzword: Shareholder mansions
When the CEO says "Jump," you say, "How high?" When the CEO buys a beautiful, big new house, you say, "Let me pay for it." Huh?
Tropical luxury estate (istockphoto.com)
Costly living spaces bring us this week's Marketplace Money buzzword: Shareholder mansions.
Shareholder mansions refers to the title of a new study. It theorizes that when a prominent CEO buys a fly new crib, investors pay for it. Researchers looked at almost every fat cat in the S & P 500. When the boss cashed in company shares to buy a home, the share prices fell. Even if the CEO bought a huge pad with their own salary. Same result: stock prices fell.
So: the next time a CEO decides, "This house just isn't big enough anymore," investors might have to look for a new home as well: the poorhouse.
