[Starboard]

When earnings go up, and the stock price follows, executive compensation also rises. There’s a big incentive to push earnings up.

[grania]

My head is just spinning. Company executives can take on more debt and the resulting bottom line will boost their compensation. So, a portion of the debt shared among the now smaller number of shareholders goes to the execs.

What a scam.

[expat_panama]

taking on debt to make their earnings look better?

big incentive to push earnings up.

Taking on debt could make earnings look better compared to the number of shares, but the amount of earnings wouldn't change unless taking on debt somehow made a serious improvement in corp's earning power.  If it did, then that's good.