Based on studies of publicly traded firms that became privately held,

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Studies have shown that managers of publicly traded firms are often not paid enough for good performance, but are also not penalized enough for bad performance. This is because managers of publicly traded firms are often incentivized to focus on short-term gains and meeting quarterly earnings targets, rather than long-term growth and sustainability. As a result, they may prioritize actions that artificially boost earnings in the short term, but may not be in the best interest of the company in the long run. Additionally, the penalties for poor performance may not be as severe, as even if the firm underperforms, the CEO may still receive a substantial golden parachute or severance package. Studies suggest that managers of publicly traded firms are not paid enough for good performance and are not penalized enough for bad performance. This can lead to short-term thinking and lack of long-term planning, which can harm the company's financial health in the long run. Additionally, the pressure to meet quarterly targets can often lead to unethical behavior and manipulation of financial statements. By contrast, private firms have more flexibility in their decision-making and can focus on long-term growth and sustainability because they do not face the same degree of public scrutiny.

Based on Studies of Publicly Traded Firms That Became Privately