I agree with the overall viewpoint of the article, so just adding an observation on how we got here. Tying management compensation to shareholder value is a good idea; the problem is in the measurement of shareholder value. If the public markets were efficient, and market cap was an accurate reflection of value, the system would not be as broken as it is.
The public markets have become a casino, where investors are often playing a game, not investing in companies they truly understand, and whose value they have analyzed. Market cap is no longer strongly correlated with company performance (revenue, net income, cash flow, customers, etc).
A return to a rational market would realign incentives, and stock-based compensation would work, but that's a lot to ask...
It is inefficient for everyone not just one person or one group. An individual therefore is not able to easily exploit the inefficiencies as they are in the same position as everyone else.
Has it ever occurred to you that whoever has the most money can manipulate stock prices so any investor is in not one of the insiders is a mark? It boggles my mind that so few investors realize the game is certainly rigged and they ARE going to consistently lose. Why not just go to a casino? There - at least theoretically - you know what the takeout is and can decide whether you get enough "fun" from your losses to make you think it worthwhile. Gambling is gambling and the house always wins.
A return to a rational market would realign incentives, and stock-based compensation would work, but that's a lot to ask...