Leader Performance And—Housing?
by Miki Saxon
Saturday we looked at some incongruous actions and compensation of various CEOs and it reminded me of something I read a year or so ago, so I went looking and found it. Amazing!
I realize that housing is a touchy subject these days, but over the last few decade as houses got bigger and bigger I found it weirder and weirder.
There’s no way to ever convince me that any family or person, really needs a seven thousand-plus square foot house in order to live comfortably—let alone 10,000 and up.
The item I remembered article was an UpFront blurb in Business Week that I found hilarious.
The research was done by Finance professors David Yermack of New York University and Crocker Liu of Arizona State University and their conclusions casts housing excess in a new light.
The bigger or pricier the house…the greater the risk of lackluster shares.
If [the CEO] buys a big mansion, sell the stock. Many of these guys have been super performers, but at some point that stops, and they reap the benefits.
Seems reasonable to me.
Remember the old saying? Something about boys and the price of their toys.
Seems like the toys’ values are going up, while the boys’ values (and value) are decreasing. (Note: As used here, “boys” is genderless.)
I doubt that the current housing market has changed that particular mindset.
So the next time you go to invest, be sure to plug in the size of the CEOs home when evaluating a company and, thinking about it, the same probably applies to the entire C suite.
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Image credit: Atwater Village Newbie on flickr
