This strikes me as a well-intentioned dumb idea, kind of like B-Corporations [0].
The whole point of a stock exchange is to allow the market to provide nearly instant feedback on a company's reported operational/financial performance and the decisions of its leadership. I agree that there is moral hazard in companies giving executives pay packages in which most of the upside is tied to short-term market performance. It's important to note that a large portion of the professional investor community feels the same way, and a lot of short positions are born of the observation, "looks like the CEO is just trying to fluff numbers for his bonus". This is where a strong board makes a huge difference. "Corporate governance" is not just wanker-jargon, it's a real thing.
As far as public markets limiting R&D....that's a weak argument. Five of the ten biggest companies in the world by market cap are tech companies that spend billions of dollars a year on R&D, most of which has no clear path to GAAP profitability [1].
To borrow from Churchill, liquid securities markets constitute the worst system of company ownership with the exception of all the other systems available.
The whole point of a stock exchange is to allow the market to provide nearly instant feedback on a company's reported operational/financial performance and the decisions of its leadership. I agree that there is moral hazard in companies giving executives pay packages in which most of the upside is tied to short-term market performance. It's important to note that a large portion of the professional investor community feels the same way, and a lot of short positions are born of the observation, "looks like the CEO is just trying to fluff numbers for his bonus". This is where a strong board makes a huge difference. "Corporate governance" is not just wanker-jargon, it's a real thing.
As far as public markets limiting R&D....that's a weak argument. Five of the ten biggest companies in the world by market cap are tech companies that spend billions of dollars a year on R&D, most of which has no clear path to GAAP profitability [1].
To borrow from Churchill, liquid securities markets constitute the worst system of company ownership with the exception of all the other systems available.
[0]: https://en.wikipedia.org/wiki/Benefit_corporation
[1]: Apple, Alphabet, Microsoft, Amazon, Facebook