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Probably better for employees. Canadian Pacific was a well governed, profitable company when Bill Ackerman raided the company and laid off 4500 unionized worker
by crmd 5y ago
Probably better for employees. Canadian Pacific was a well governed, profitable company when Bill Ackerman raided the company and laid off 4500 unionized workers to goose the share price. I would be furious if a sociopathic activist investor did this to my company.
- missedthecue 5y agoI don't think it was "well governed". It was bloated and inefficient. Look at the operating ratio over time between CP and it's direct competitor CN - the lower the better. https://corpgov.law.harvard.edu/wp-content/uploads/2016/12/Capture.png https://corpgov.law.harvard.edu/wp-content/uploads/2016/12/C... CP was languishing until Ackman fired their CEO in 2011 and put Hunter Harrison at the helm.
- silexia 5y agoSo paying employees the minimum amount possible is efficient to you? Maybe it results in better short-term profits, but it destroys the company long-term.
- JumpCrisscross 5y ago> paying employees the minimum amount possible is efficient to you? Did pay go down? I don't think that's accurate. Paying a bunch of excess employees, yes, that's not efficient. That's practically textbook inefficient. Are we really on a forum run by a VC debating capitalism?
- crmd 5y agoThere are plenty of capitalists who believe one of the several purposes of a company is to provide meaningful jobs in the communities in which they operate. When company owners cut the payroll to hoard profits, the remaining employees have to work harder for the same salary. It is the literal definition of the investor class siphoning wealth from the working class.
- silexia 5y agoI am a libertarian, and founded and still run a company with 200+ employees. VCs destroy capitalism. They force out founders and install hired guns. The VCs and their hired guns break the promises made by founders to their stakeholders. They put insane pressure on growth at all costs. All business ethics are abandoned.
- crmd 5y agoCP was widely recognized as a well-governed company prior to the corporate raid. FTFA: >In 2009, CP was awarded the Governance Gavel Award for Director Disclosure by the Canadian Coalition for Good Governance. Then, in 2011, CP ranked 4th out of some 250 Canadian companies in the Globe & Mail Corporate Governance Ranking.
- missedthecue 5y agoI'm not sure how much weight you should give to industry awards. Enron was named "America's Most Innovative Company" by Fortune for six consecutive years, from 1996 to 2001. Enron Chief Executive Kenneth Lay received the Marco Polo Award in 1999, one of the highest awards given to entrepreneurs and innovators. Enron finance chief Andrew S. Fastow received the Excellence Award from CFO magazine in 1999.