As for the number of executives, that number will vary from company to company as some need more positions than others. When looking at the executives, be sure to take a look at their experience and how they have benefited the company and how they will continue benefiting the company. Be sure to analyze their past performance and track record because more times than note, history will repeat itself.
What to look for specifically is when you find a CEO of a company you are invested in or researching, look and see how long they’ve been with the company. If they’ve been there for a long time, it could indicate they know what their doing and that they have a good track record with the company. If they are new, keep an eye out and make sure they are guiding the company in the correct direction. Also, take a step back and see why the previous CEO left. It could be something as simple as they retired, or more extreme such as they were involved with a scandal at the company. Most recently notable would be the Wells Fargo saga or opening accounts without the people’s knowledge.
After you’ve examined the CEO, look at the other executive heads such as CFO, COO, CIO, and others to ensure their goals are aligned with the company’s. You can also look at how many shares each owns as that can point to how much skin they have in the game. As it is said, a chain is only as strong as its weakest link, which means everyone could be well, but if the CIO is making risky investments that are not in the best interest of the company, it could take everyone down. As a potential or current investor, you want to know they have the best interests of the company first, and the investors second. If that is the case, everything should play out well and in everyone’s favor.
You can find this information on the company’s page, but you also want to look at the quarterly SEC filings, along with the conference calls, as that will allow you to gain insight to the mood among the executives. Take all that information and formulate your opinion, as the final decision ultimately rests on your shoulders.
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Nathan Young is a Senior Member of Macroaxis Editorial Board - US Equity Analysis. With years of experience in the financial sector, Nathan brings a diverse base of knowledge. Specifically, he has in-depth understanding of application of technical and fundamental analysis across different equity instruments. Utilizing SEC filings and technical indicators, Nathan provides a reputable analysis of companies trading in the United States.
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