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Which is their right. Investors own the business. If you don't want to lose control, don't sell voting rights for money.
by stvswn 11y ago
Which is their right. Investors own the business. If you don't want to lose control, don't sell voting rights for money.
- x0x0 11y agoI totally agree, and a runout is probably higher in expected npv than their current strategy. It's just weird, however, given they hired Marissa Mayer. She is, or at least is perceived to be, a product specialist; nothing about her, professionally or temperamentally, seems like she'd be good at being a ruthless cost cutter who operates run-outs.
- dragonwriter 11y agoFirst, the set of investors at the time Mayer was hired are not exactly the set of investors now, and second, the opinion of the investors now (even to the extent that they are the same investors) that Mayer -- or anyone else -- can turn around the Yahoo! product may not be the same as it was at the time she was hired.
- stvswn 11y agoI agree generally, but I don't think it's inconsistent from the investors' points of view. They could have hired her with hopes for a renaissance and then just lost patience. Mayer's performance might have disappointed them (in the sense that she's responsible for everything, not her personal performance). That's why she gets the big bucks -- she was expected to deliver results. I actually take consolation in the fact that CEOs are under tremendous pressure to deliver results to shareholders. I would be much angrier if the board were enjoying the company jet and giving Mayer the benefit of every doubt while Yahoo! burned. That type of look-the-other-way, cozy with the CEO type of board used to be more normal -- before activists, hedge funds, LBOs, etc. -- and there was a lot more disgusting behavior (I'm thinking specifically about Ross Johnson in Barbarians at the Gate -- flying his board to golf outings while he robbed RJR Nabisco blind).
- ashwinaj 11y agoInvestors are the millions of individual share holders, not just the bunch of wall street hedge funds and holding companies.
- stvswn 11y agoIf you're advocating that the hedge fund managers and pension funds accept a smaller return on investment in order to save Yahoo! engineers from layoffs -- that's a breach of fiduciary duty and against the law.
- craigyk 11y agoNo. It is not against the law. I think it is only unlawful in the case where the company is actively up for sale.
- stvswn 11y agoFiduciary duty applies to all agents acting on the behalf of principals, all the time. If an agent were to honestly believe that it was in the best interests of shareholders (financially) to keep Yahoo! jobs, it would be fine for him to vote that way. If an agent were to believe that layoffs were best for shareholder value, but voted otherwise in order to fulfill another objective, that's absolutely a breach of fiduciary duty, which is a legal duty.
- ashwinaj 11y ago> If an agent were to honestly believe "Honest" or it's derivatives is the last word I would use in a sentence which includes Wall Street. Haven't Wall Street proven time and again that they are only interested in short term gains rather than a long term vision? I would be skeptical about any advice/opinion from a Wall Street firm.
- the_watcher 11y agoIncorrect. It is actually against the law.