46 ms·
What seems to be always forgotten is that those over-aggressive CEO's are elected to satisfy the demand of the shareholders, and the bulk of those want only one
by misja111 10y ago
What seems to be always forgotten is that those over-aggressive CEO's are elected to satisfy the demand of the shareholders, and the bulk of those want only one single thing: more profit on their shares.
And for the share price to grow, being just a solid bank is not enough.
This doesn't apply only to banks, it happens also at other exchange listed companies. But banks are the most tragic example of course, because if those aggressive policies fail, the government has to step in.
Anyway, the bottom line is: it's not like all troubles in the financial world are all the fault of some evil CEO's. The whole system is at fault, including the shareholders themselves.
- maxxxxx 10y agoIn the case of Daimler-Chrysler there was no shareholder pressure. They would have been happy with getting a nice dividend every year. It was pure ego trip by the CEO (Schrempp) who wanted to play with the other big boys like GE. They created a huge and expensive corporate headquarter far away from any car-related activity to pretty much signal that management is above the guys who produce cars. Same for Deutsche Bank when they declared a 25% return on equity goal. Many people said there is no way they can achieve this but the CEO kept pushing so they had to rely on shady business practices and increase risk. It's a pure ego trip. Nothing else.