What's going on?

British medical equipment company Smith & Nephew lost its CEO on Monday. Please sir, he just wanted some more than the $6 million he was on�

What does this mean?

Smith & Nephew hired Namal Nawana in May of last year. But Nawana’s previous job paid him almost double what he was going to make in 2019, and he�s spent the last few months arguing with the company about it.

British investors are notoriously reluctant to pay bumper salaries. Smith & Nephew did consider a move to the US (where executive pay tends to be higher) to keep hold of Nawana. But when that didn�t happen, he walked � perhaps in the hope some Artful Dodger might take a needy multimillionaire under their wing.

Why should I care?

The bigger picture: Who will buy?
Smith & Nephew�s stock fell almost 10% on Monday. That might be because the company�s stock rose 40% under Nawana, and there�s no guarantee a new CEO can achieve the same results. Not for a lack of incentive, mind you: as is often the case at big companies, pay is partly linked to the company�s profit and stock price. That might encourage the CEO to use the company�s money to buy back its shares � reducing the number of shares available, driving up the price and securing a tidy bonus. But some worry it makes them too focused on short-term returns, rather than positioning the business for long-term success.

For markets: I�d do anything.
German fintech Wirecard is another potential example of management looking out for number one. It�s been accused of inflating its customer numbers to make its profits look more attractive to investors � which would�ve benefited its CEO, who owns over 7% of its stock and is, in part, paid based on the company�s performance. Wirecard denies any wrongdoing, and on Monday appointed auditors to investigate the situation further. That sent its shares up more than 6% � but they�re still below where they were when the latest reports of the scandal broke last week.