Finance HELP anyoneeee??
 

hey guys...i've got this really wierd finance question for my final finance project....
can anyone help me on it?
"some argue that Canadian companies are being taken over by foreign firms because the CEOs of these companies have huge incentive that this will happen. For example, it is common that the CEO receieves a big bonus if the firm he/she manages is taken over by another firm. What do you think; are these types of incentives bad for Canadian investors?"
thank you in advance=)

Try looking through some reports from the CD Howe institute.

I think you partially answered your question. But to finish it, yes it's terrible, Canadian companies are becoming Americanized.

Socialist country we live in... becoming less and less each day.

Need help on opinion question?

bad because profits are in away taken away from Canada and goes to the American owners

^he didn't say a thing about American owners.

Incentives are misdirected.

In the event of a takeover, the target company's stock price typically goes up.

CEO's performance and bonus is typically tied to the short term (<1year) increase in the stock price.

CEO's incentive is to raise the short term stock price, so he goes out and finds a buyer whether it is in the shareholder's interests or not.

pretty sure it's in the textbook

chapter 1.. near the end i think