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Salesforce is a public company, which means the CEO has a legal duty to optimize for maximum benefit for the shareholders of said company under the law. "Chang

Salesforce is a public company, which means the CEO has a legal duty to optimize for maximum benefit for the shareholders of said company under the law. "Change the law so I don't have to do scummy things," is actually fairly rational.

twblalock 8y ago
> Salesforce is a public company, which means the CEO has a legal duty to optimize for maximum benefit for the shareholders of said company under the law. That's a common misconception. It's not true.
- Mononokay 8y ago
  Not Statute, but case law. See eBay vs. Newmark. Unless I'm misinterpreting something about it, in which case, can you explain? (Genuine question there.)
  - gowld 8y ago
    Choose an article to read from these results: https://www.google.com/search?q=myth+maximize+shareholder+value https://www.google.com/search?q=myth+maximize+shareholder+va...
    - Mononokay 8y ago
      Literally every one of those goes against current case law, which can be seen in eBay v. Newmark; plus "LMGTFY" isn't really an explanation.
      - snowwrestler 8y ago
        I think it is instructive that while eBay was able to void the Craigslist poison pill provision in court, they have not been able to, for example, sue Craigslist into increasing revenue and profit by charging a per-listing fee on "for sale" items. To my knowledge eBay hasn't even tried that--no doubt because they know it would be futile. The practical question is not necessarily whether Craigslist has a duty to maximize shareholder value, but rather, to what extent can shareholders use the courts to second-guess the business decisions of corporate management? As the links in the Google search above attest, decades of precedent seems to suggest: almost no extent at all. To look at another high-profile example, Apple CEO Tim Cook--in a shareholders meeting!--said "When we work on making our devices accessible by the blind, I don't consider the bloody ROI. If you want me to do things only for ROI reasons, you should get out of this stock." While it made some news, I don't recall a shareholder lawsuit forcing Tim out of Apple for refusing to maximize shareholder value.
  - icebraining 8y ago
    The opinion is quite readable. Essentially the judge says that he's only applying that standard (called the Unocal test) on "defensive actions by a target corporation’s board of directors in a takeover context". On the action that didn't fit that profile, despite being potentially harmful to eBay, he deferred to their best judgment. I'm no lawyer, but the way I read that decision is: do what you think best, just don't purposefully mine the field against one of your shareholders.
- mc808 8y ago
  Even if that were true and it were also true that privacy features would harm shareholders, then lobbying to make those privacy features mandatory would itself be acting against shareholder interests.
maxxxxx 8y ago
There is no such legal duty. His only duty is to engage in lawful business. And not to get fired by his board.
- Mononokay 8y ago
  Case law states otherwise; see eBay vs. Newmark and Dodge vs. Ford Motor Company.
  - rosser 8y ago
    eBay v Newmark hinges very much on the specifics of the contract, and how it was structured to create this sort of duty on Craigslist's part to eBay, rather than being some general bit of case law that codifies the tired — and wrong — "'fiduciary duty' == 'maximizing shareholder profits'" trope. We can have a great, and factually-based discussion on whether Newmark, et al violated their contractual duty, under the terms of that specific contract; extrapolating from that to "but fiduciary duuuuty!" (for these narrowly-construed notions of "fiduciary duty") is unsupported by the facts, or the case law. Dodge v Ford is also, afaik, generally considered a weak precedent for the notion — which was specifically articulated by the state supreme court, and therefore doesn't bind peer state courts, or any Federal courts. ("Persuasive precedent" != "binding precedent".) Several states' courts have also rejected the same argument in later cases. "The general legal position today is that the business judgment that directors may exercise is expansive. Management decisions will not be challenged where one can point to any rational link to benefiting the corporation as a whole." [1] (IANAL.) [1] https://en.wikipedia.org/wiki/Dodge_v._Ford_Motor_Co https://en.wikipedia.org/wiki/Dodge_v._Ford_Motor_Co.
    - Mononokay 8y ago
      In eBay v Newmark, the full quote you're looking for: "[Newmark and Buckmaster] did prove that they personally believe craigslist should not be about the business of stockholder wealth maximization, now or in the future. As an abstract matter, there is nothing inappropriate about an organization seeking to aid local, national, and global communities by providing a website for online classifieds that is largely devoid of monetized elements. Indeed, I personally appreciate and admire [Newmark's and Buckmaster's] desire to be of service to communities. The corporate form in which craigslist operates, however, is not an appropriate vehicle for purely philanthropic ends, at least not when there are other stockholders interested in realizing a return on their investment. Jim and Craig opted to form craigslist, Inc. as a for-profit Delaware corporation and voluntarily accepted millions of dollars from eBay as part of a transaction whereby eBay became a stockholder. Having chosen a for-profit corporate form, the craigslist directors are bound by the fiduciary duties and standards that accompany that form. Those standards include acting to promote the value of the corporation for the benefit of its stockholders."

twblalock 8y ago

> Salesforce is a public company, which means the CEO has a legal duty to optimize for maximum benefit for the shareholders of said company under the law. That's a common misconception. It's not true.

Mononokay 8y ago
Not Statute, but case law. See eBay vs. Newmark. Unless I'm misinterpreting something about it, in which case, can you explain? (Genuine question there.)
- gowld 8y ago
  Choose an article to read from these results: https://www.google.com/search?q=myth+maximize+shareholder+value https://www.google.com/search?q=myth+maximize+shareholder+va...
  - Mononokay 8y ago
    Literally every one of those goes against current case law, which can be seen in eBay v. Newmark; plus "LMGTFY" isn't really an explanation.
    - snowwrestler 8y ago
      I think it is instructive that while eBay was able to void the Craigslist poison pill provision in court, they have not been able to, for example, sue Craigslist into increasing revenue and profit by charging a per-listing fee on "for sale" items. To my knowledge eBay hasn't even tried that--no doubt because they know it would be futile. The practical question is not necessarily whether Craigslist has a duty to maximize shareholder value, but rather, to what extent can shareholders use the courts to second-guess the business decisions of corporate management? As the links in the Google search above attest, decades of precedent seems to suggest: almost no extent at all. To look at another high-profile example, Apple CEO Tim Cook--in a shareholders meeting!--said "When we work on making our devices accessible by the blind, I don't consider the bloody ROI. If you want me to do things only for ROI reasons, you should get out of this stock." While it made some news, I don't recall a shareholder lawsuit forcing Tim out of Apple for refusing to maximize shareholder value.
- icebraining 8y ago
  The opinion is quite readable. Essentially the judge says that he's only applying that standard (called the Unocal test) on "defensive actions by a target corporation’s board of directors in a takeover context". On the action that didn't fit that profile, despite being potentially harmful to eBay, he deferred to their best judgment. I'm no lawyer, but the way I read that decision is: do what you think best, just don't purposefully mine the field against one of your shareholders.
mc808 8y ago
Even if that were true and it were also true that privacy features would harm shareholders, then lobbying to make those privacy features mandatory would itself be acting against shareholder interests.

maxxxxx 8y ago

There is no such legal duty. His only duty is to engage in lawful business. And not to get fired by his board.

Mononokay 8y ago
Case law states otherwise; see eBay vs. Newmark and Dodge vs. Ford Motor Company.
- rosser 8y ago
  eBay v Newmark hinges very much on the specifics of the contract, and how it was structured to create this sort of duty on Craigslist's part to eBay, rather than being some general bit of case law that codifies the tired — and wrong — "'fiduciary duty' == 'maximizing shareholder profits'" trope. We can have a great, and factually-based discussion on whether Newmark, et al violated their contractual duty, under the terms of that specific contract; extrapolating from that to "but fiduciary duuuuty!" (for these narrowly-construed notions of "fiduciary duty") is unsupported by the facts, or the case law. Dodge v Ford is also, afaik, generally considered a weak precedent for the notion — which was specifically articulated by the state supreme court, and therefore doesn't bind peer state courts, or any Federal courts. ("Persuasive precedent" != "binding precedent".) Several states' courts have also rejected the same argument in later cases. "The general legal position today is that the business judgment that directors may exercise is expansive. Management decisions will not be challenged where one can point to any rational link to benefiting the corporation as a whole." [1] (IANAL.) [1] https://en.wikipedia.org/wiki/Dodge_v._Ford_Motor_Co https://en.wikipedia.org/wiki/Dodge_v._Ford_Motor_Co.
  - Mononokay 8y ago
    In eBay v Newmark, the full quote you're looking for: "[Newmark and Buckmaster] did prove that they personally believe craigslist should not be about the business of stockholder wealth maximization, now or in the future. As an abstract matter, there is nothing inappropriate about an organization seeking to aid local, national, and global communities by providing a website for online classifieds that is largely devoid of monetized elements. Indeed, I personally appreciate and admire [Newmark's and Buckmaster's] desire to be of service to communities. The corporate form in which craigslist operates, however, is not an appropriate vehicle for purely philanthropic ends, at least not when there are other stockholders interested in realizing a return on their investment. Jim and Craig opted to form craigslist, Inc. as a for-profit Delaware corporation and voluntarily accepted millions of dollars from eBay as part of a transaction whereby eBay became a stockholder. Having chosen a for-profit corporate form, the craigslist directors are bound by the fiduciary duties and standards that accompany that form. Those standards include acting to promote the value of the corporation for the benefit of its stockholders."