The Hard Part About Investing

When I contemplate a potential investment, one of the hard decisions to make is defining the point at which a management team’s executive compensation becomes so excessive that it ought to deter investment.

So far in my life, the only stock I ever disqualified from consideration solely on the grounds of excessive compensation was Occidental Petroleum, where Ray Irani was doing things like collecting $76 million pay packages here and there. He’s gone now, but you can read about some of his collected spoils by clicking here.

lIn addition to executives given lavish pay packages, there is the fact that some stock options come with low performance hurdles. For instance, I was reading this article on the St. Louis Post-Dispatch website about the new President and Chief Operating Officer at Peabody Energy. Per the Post-Dispatch article, this is what Glenn Kellow has to do at Peabody to get … Read the rest of this article!