It is a good thing for chief executive officers and key management personnel to be concerned about the stock of their company, but another matter to be publicly hard selling it to prospective investors.
Earlier this week, State Bank of India chairman Arundhati Bhattacharya, stunned regulators and investors alike when she urged investors to buy shares of the bank. In an interview to a business daily she said: “From FY19 we will be much better. Therefore, I urge you all to buy our shares now. You won’t get it at such a price.”
Fund managers and some regulators claim that CEOs and promoters are increasingly trying to condition the market by talking up their stock, as the performance of the share price is a key result area. Also, compensation of key management personnel at many private companies is linked to the performance of the stock. However, in the case of public sector companies, this is not the case.