Executives also need to move away from the practice of incessantly monitoring their stock prices, because TRS is largely meaningless over short periods. In a typical three-month time frame, more than 40 percent of companies experience a share-price increase or decrease by more than 10 percent4—movements that are nothing more than random. Therefore, executives shouldn't even try to understand share-price changes unless they move more than 2 percent in a single day or 10 percent in a quarter (versus a relevant benchmark).
