executive options

[Max Sawicky]

. . .
In a rational but simple world, the returns to
stock ownership ought to track the ratio of
profits to capital stock, or the rate of
return on capital.  Putting aside all the
reasons this does not happen, the ROR could
exceed GDP growth indefinitely without profits
eating up GDP. . . .

Amendment:  Share values should increase with
the level of capital and/or profits (a company
gets bigger, it is worth more), not just with
a change in the ROR.  The ror on share ownership
is not the same as ROR on capital.  It remains
the case, I think, that the ROR need not equal
the growth rate of GDP, capital, or profits.

mbs