4 ms·
Yup, this what what I eventually grew to dislike the most about working for a public company. At the end of the day the stock price was the only thing that mat
by jlkuester7 4y ago
Yup, this what what I eventually grew to dislike the most about working for a public company. At the end of the day the stock price was the only thing that mattered. It would have been easier to stomach if the shareholders had a long-term vision of a healthy successful company whose value accumulates over time by making good long-term business decisions. But, quarterly returns were the name of the game. The executive compensation was tied to that performance and that cemented it into the basic strategy of all decisions.... (And this was for a large (20000+ employees), well established (40+ years old), corporation in a relatively stable sector (health care tech).
- bombcar 4y agoThe problem with public companies is they effectively have no shareholders; none that can actually do anything to affect the company. Which leaves the company to be run by the managers for the managers. Bogle (the father of the index fund) talks about how the index fund and friends has warped the benefits of ownership to leave companies effectively "unowned".
- xxpor 4y agoHow is that any different from a typical private company?
- api 4y agoVCs and other private investors are usually more active.
- xxpor 4y agoYeah, I guess I was thinking more bootstrapped/Koch-like/small business than private-with-investors
- bombcar 4y agoA private company (and some public companies) have shareholders/owners that are large enough and active enough to control the company (Ford, famously). Most just are kind of "managed", especially after a "star CEO" or similar moves on.
- Analemma_ 4y agoThe alternatives to index funds are either that ordinary middle-class people can't participate in ownership of companies at all, or that they have to pay extortionate fees to fund managers. No thank you.
- bombcar 4y agoThe choice isn't between index/active fund ownership - the question is how to make it so the company is not managed for the benefit of the managers, but actually for the benefit of the owners, however many or few there are. Some companies in Europe have what might be part of the solution, with the union et al having board representation.
- api 4y agoI've heard this before: "The product isn't the product. The stock is the product." This can be true in VC-backed private companies too, but with public companies it seems to be even more amplified since the investors unlike angels/VCs often don't even know let alone care what the company really does.