THE LEX COLUMN: Executives need to believe in share acquisitions
It is not enough that shares are bought in the market to demonstrate faith in their companies’ prospects
A UK agriculture minister once tried to make his four-year-old daughter chomp on a beefburger at the height of a public panic over mad cow disease. The daughter refused and the stunt rebounded. There’s a moral here: if you really want to make a stand, it is best to do it yourself. Consider the big banks across Europe, where several senior executives have recently bought shares in the market to demonstrate faith in their companies’ prospects. ABN Amro finance chief Clifford Abrahams, for example, spent half a year’s salary on shares in the Dutch bank last week. Earlier in the month, Jean-Pierre Mustier spent a similar sum on shares in UniCredit, the Italian bank he runs. As a way of rallying support, such purchases can be effective. In February 2016, for example, Jamie Dimon appeared to put a stop to a general rout in bank stocks by buying $26m worth of shares in JPMorgan Chase. The gesture was big but affordable: about 13% of the money the CEO earned that year, through regular award...