Buzzword: Shareholder mansions

Marketplace Staff Jul 13, 2007
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Buzzword: Shareholder mansions

Marketplace Staff Jul 13, 2007
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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.

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