Prominent Silicon Valley executives and investors are backing a new stock exchange dubbed the Long-Term Stock Exchange (LTSE). The exchange is designed to combat obsessions with short-term earnings and profits. “Short-term profits have become so important that they can overshadow long-term values,” said Richard M. Aboulafia, an aerospace analyst at Teal Group. Tying executive pay to short-term financial gains would also be prohibited. The exchange will reportedly seek regulatory approval by the end of the year. Critics say tenure voting enables managers to duck short-term accountability.
Prominent Silicon Valley executives and investors are backing a new stock exchange dubbed the Long-Term Stock Exchange (LTSE). The exchange is designed to combat obsessions with short-term earnings and profits. Shareholders in companies listed on the exchange would accept a "tenure voting" system where longer-term shareholders have more say over the governance of a company. Tying executive pay to short-term financial gains would also be prohibited. The exchange will reportedly seek regulatory approval by the end of the year. Critics say tenure voting enables managers to duck short-term accountability.