Too Much Employer Stock? Don't Ignore Diversification

By Mark Poerio (July 12, 2018, 2:07 PM EDT) -- From Forbes to the New York Times to the U.S. Securities and Exchange Commission, there have been recent thought-provoking commentaries (noted below) about the risks and potential abuses that may arise when executives own or have stock awards that make them feel overly invested in their employer's stock. Nevertheless, board members and compensation committees may turn a deaf ear. That is understandable because diversification programs seem generally contrary to a core goal of executive compensation, namely: aligning executive interests with those of shareholders. Sometimes, however, the pendulum swings too far, with diversification being sensible in situations such as those discussed below....

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