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From a business ownership POV that's bad management and bad for the business. Shouldn't the owners optimize by getting rid of such management? FWIW I know the

From a business ownership POV that's bad management and bad for the business. Shouldn't the owners optimize by getting rid of such management? FWIW I know the answer: management typically goes unchecked which is a huge problem. Managers vote themselves money and leave owners with the downside risk. Boards tend to be toothless rubber-stamps. Doesn't mean I have to like it (as an employee or a shareholder).

jnwatson 4y ago
The biggest vulnerability in a corporation is that the interests of management and ownership (the shareholders) aren’t aligned. A common situation repeated over and over is that a manager has the opportunity to take huge risks for a big bonus, yet the worst that can happen is they lose their job. Case in point, it took a small team at AIG only 6 weeks of selling a financial product to bankrupt the 90-year-old company and contribute to the 2008 crash, ultimately leading to a Fed bailout.
wastedimage 4y ago
I think they did? It was national news a few months ago. I went and found it - https://www.cnbc.com/2022/06/03/amazon-ceo-of-worldwide-consumer-dave-clark-resigns.html https://www.cnbc.com/2022/06/03/amazon-ceo-of-worldwide-cons...
- mandeepj 4y ago
  It’s unrelated! He’s cashing out to start something else, maybe a startup
  - wastedimage 4y ago
    Isn't that just what you say though when a senior executive fucks up? I just assumed. No company is ever going to say they dumped some executive. They are going to happily depart ways every time.
    - mandeepj 4y ago
      True! But, those who fuckup don’t leave with this much fanfare; they quietly fade away into vacuum. Also, 23 years is a long time. Stupidity doesn’t take that long to show cracks.
hnfong 4y ago
Elon Musk did just that. On the other hand, if the shareholders are mostly institutional funds, then fund managers generally aren't in the business of doing activist stuff for their many dozens of investments...

jnwatson 4y ago

The biggest vulnerability in a corporation is that the interests of management and ownership (the shareholders) aren’t aligned. A common situation repeated over and over is that a manager has the opportunity to take huge risks for a big bonus, yet the worst that can happen is they lose their job. Case in point, it took a small team at AIG only 6 weeks of selling a financial product to bankrupt the 90-year-old company and contribute to the 2008 crash, ultimately leading to a Fed bailout.

wastedimage 4y ago

I think they did? It was national news a few months ago. I went and found it - https://www.cnbc.com/2022/06/03/amazon-ceo-of-worldwide-consumer-dave-clark-resigns.html https://www.cnbc.com/2022/06/03/amazon-ceo-of-worldwide-cons...

mandeepj 4y ago
It’s unrelated! He’s cashing out to start something else, maybe a startup
- wastedimage 4y ago
  Isn't that just what you say though when a senior executive fucks up? I just assumed. No company is ever going to say they dumped some executive. They are going to happily depart ways every time.
  - mandeepj 4y ago
    True! But, those who fuckup don’t leave with this much fanfare; they quietly fade away into vacuum. Also, 23 years is a long time. Stupidity doesn’t take that long to show cracks.

hnfong 4y ago

Elon Musk did just that. On the other hand, if the shareholders are mostly institutional funds, then fund managers generally aren't in the business of doing activist stuff for their many dozens of investments...