Attractiveness of Stock Splits for Executives

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Attractiveness of Stock Splits for Executives
Vakhtang Kelbakiani, Student (University), Georgia

I have heard that company executives are excited every time their stock splits (say, three for one)...
What is so good about this event, except the increase in stock flexibility?

Why a Stock Split is Attractive for Executives
Jaap de Jonge, Editor, Netherlands
One reason is that many executives personally own stock in their own firm. That could be part of an employee stock option plan or simply because they believe in their own company and improvement efforts.
Suppose one exective currently holds 1000 stocks.
If the stock price increases by $0.10 then the value of his shares increases by 1000 x $0.10 = $100.
After there has been a stock split as you say 3 for 1, then after the split the executive holds 3000 shares.
Suppose now the price of the stock goes up by $0.10, then the value of his shares goes up by 3000 x $0.10 = $300.



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