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I think it's more of an ideological issue than the journalist or headline being inaccurate. To oversimplify: If you buy into the idea that a corporation is the

I think it's more of an ideological issue than the journalist or headline being inaccurate. To oversimplify: If you buy into the idea that a corporation is there for its shareholders, then there's little to be outraged about. If you believe a corporation is there for both its employees and shareholders, then there may be some outrage to be had. There is no universal truth there. The mainstream perception right now is the shareholder-oriented view, and the more I understand capitalist incentive structures, and the fact that buying into the market is pretty much the underpinning behind our retirement structure, the more I personally subscribe to that view. But not everyone does, and there are many good reasons to not! Even within the shareholder-oriented view, there's also a question of short term vs long term thinking. Does the slump that's causing the job cuts justify losing the domain knowledge, momentum, etc. that might come alongside job cuts? Is Intel making a bad call here? Even as a shareholder I might think Intel's being too drastic. The headline, while potentially outrage-baiting, does carry important information. If Intel were losing so much money that it was unable to pay dividends, then the job cuts would be almost universally justifiable. I certainly would have some sour grapes if I were laid off in the midst of an organization that can still pass value to its shareholders, especially if I felt that I were a part of that success and effort.

qeternity 3y ago
> If you buy into the idea that a corporation is there for its shareholders It's not an idea, it's a literal legal duty.
- plokiju 3y ago
  That doesn’t mean it can’t be questioned
- jakelazaroff 3y ago
  I don't think that's actually true. e.g. a quick google search turns up [1] [2] [3] which all state that a board is not legally obligated to maximize shareholder value. Do you have a source for the law/court decision? [1] https://www.nytimes.com/roomfordebate/2015/04/16/what-are-corporations-obligations-to-shareholders/corporations-dont-have-to-maximize-profits https://www.nytimes.com/roomfordebate/2015/04/16/what-are-co... [2] https://insight.kellogg.northwestern.edu/article/shareholder-value-purpose-corporation https://insight.kellogg.northwestern.edu/article/shareholder... [3] https://medium.com/bull-market/there-is-no-effective-fiduciary-duty-to-maximize-profits-939ae50d0572 https://medium.com/bull-market/there-is-no-effective-fiducia...
  - mason55 3y ago
    Well, OP did say > a corporation is there for its shareholders Which is a little different from maximizing shareholder value and is kinda true. As the second link says > a CEO or board is not legally obliged to maximize shareholder value. They need to maximize the value of the corporation and act in its best interest. Which IMO agrees with OP. The company is there for the shareholders. The execs and directors have a ton of leeway when it comes to acting in the corporations best interest, but if an exec would be in trouble if they said "we're implementing this policy for the benefit of employees and it's going to come at the expense of the company and we have no argument for how this is good for the company". But it's not that hard to take the same policy and say "happier employees are good for the company"
- postalrat 3y ago
  And they have no legal duty to their employees?
- mason55 3y ago
  > It's not an idea, it's a literal legal duty. It is a legal duty but there's a huge amount of leeway. You could certainly implement lots of policies that put employees on close to equal footing and argue that it's in the best interest of the company. No one would find you in breach of fiduciary duty, although the board/shareholders might disagree and remove you.
- newswasboring 3y ago
  We should really change that if that's true.
- lemmsjid 3y ago
  There's an oft passed around cartoon where a guy in a tattered business suit is in a cave around a fire talking to children, saying, "Yes, the planet got destroyed. But for a beautiful moment in time we created a lot of value for shareholders." That cartoon has resonated over the years because it illustrates a point that complexifies the whole shareholder-value concept: you can recognize that a corporation's fiduciary duty is to its shareholders, but you still have a long term / short term thinking problem. If a corporation is just shoveling its profits at shareholders without consideration for the future, or, in the cartoon example, destroying the planet, is it really providing them the best value? There is no universal definition of shareholder value, legally or otherwise. I'm a shareholder in many companies, and to me they should deliver me profits when it makes sense, take care of their employees, not harm the environment, not overspend, not cut corners on health or safety... it's a long list, really.
  - mamurphy 3y ago
    This tweet has the cartoon: https://twitter.com/Benioff/status/549339156854214656?lang=en https://twitter.com/Benioff/status/549339156854214656?lang=e... I also found it at the New Yorker: https://www.newyorker.com/cartoon/a16995 https://www.newyorker.com/cartoon/a16995 I am unsure of the original source.
- aceofspades19 3y ago
  It's a legal duty in the sense that the CEO of Intel has to act broadly in the best interest of the company, ie. he would be in trouble if he made decisions on purpose just to make the company lose money. But there is no duty to maximize share price or profits at all costs no matter what. See: https://www.nytimes.com/roomfordebate/2015/04/16/what-are-corporations-obligations-to-shareholders/corporations-dont-have-to-maximize-profits https://www.nytimes.com/roomfordebate/2015/04/16/what-are-co...
- p_l 3y ago
  No. There was never a legal duty to maximize shareholder returns. There's a legal duty to not cheat shareholders by idiotic spending, pocketing the investment money, and the like. But there was never a duty to optimize returns to shareholders.
  - qeternity 3y ago
    No. I never said maximize shareholder returns. You hallucinated that. I said that corporations exist for their shareholders. This is a legal fiduciary duty.
    - 1propionyl 3y ago
      > corporations exist for their shareholders The history of incorporation suggests the contrary. This attitude is backed up mainly only by 1980s-onwards neo-proprietarian ideology/faith/apologia. > This is a legal fiduciary duty. Much like use of fiduciary in the usual sense: not screwing over your shareholders is, yes. Not choosing the plan to maximize the right outcomes ("quality attributes" other than profit exist) after the right length (short or long?) time not being the best one? No.
    - p_l 3y ago
      Corporations exist to fulfill the purposes stated in their incorporation documents. Shareholders usually get some vote through the board, but they are secondary to the actual incorporation documents.
screwturner68 3y ago
It maybe considered the mainstream perception now but prior to Reagan/Greenspan that was not the mainstream perception. Knowing several Chicago School economists I can say that Friedman's ideas aren't as lauded as you might think and in practice often turn out to be disasters -I give you water in Chile as an example.
- lemmsjid 3y ago
  An excellent point and I agree.

qeternity 3y ago

> If you buy into the idea that a corporation is there for its shareholders It's not an idea, it's a literal legal duty.

plokiju 3y ago
That doesn’t mean it can’t be questioned
jakelazaroff 3y ago
I don't think that's actually true. e.g. a quick google search turns up [1] [2] [3] which all state that a board is not legally obligated to maximize shareholder value. Do you have a source for the law/court decision? [1] https://www.nytimes.com/roomfordebate/2015/04/16/what-are-corporations-obligations-to-shareholders/corporations-dont-have-to-maximize-profits https://www.nytimes.com/roomfordebate/2015/04/16/what-are-co... [2] https://insight.kellogg.northwestern.edu/article/shareholder-value-purpose-corporation https://insight.kellogg.northwestern.edu/article/shareholder... [3] https://medium.com/bull-market/there-is-no-effective-fiduciary-duty-to-maximize-profits-939ae50d0572 https://medium.com/bull-market/there-is-no-effective-fiducia...
- mason55 3y ago
  Well, OP did say > a corporation is there for its shareholders Which is a little different from maximizing shareholder value and is kinda true. As the second link says > a CEO or board is not legally obliged to maximize shareholder value. They need to maximize the value of the corporation and act in its best interest. Which IMO agrees with OP. The company is there for the shareholders. The execs and directors have a ton of leeway when it comes to acting in the corporations best interest, but if an exec would be in trouble if they said "we're implementing this policy for the benefit of employees and it's going to come at the expense of the company and we have no argument for how this is good for the company". But it's not that hard to take the same policy and say "happier employees are good for the company"
postalrat 3y ago
And they have no legal duty to their employees?
mason55 3y ago
> It's not an idea, it's a literal legal duty. It is a legal duty but there's a huge amount of leeway. You could certainly implement lots of policies that put employees on close to equal footing and argue that it's in the best interest of the company. No one would find you in breach of fiduciary duty, although the board/shareholders might disagree and remove you.
newswasboring 3y ago
We should really change that if that's true.
lemmsjid 3y ago
There's an oft passed around cartoon where a guy in a tattered business suit is in a cave around a fire talking to children, saying, "Yes, the planet got destroyed. But for a beautiful moment in time we created a lot of value for shareholders." That cartoon has resonated over the years because it illustrates a point that complexifies the whole shareholder-value concept: you can recognize that a corporation's fiduciary duty is to its shareholders, but you still have a long term / short term thinking problem. If a corporation is just shoveling its profits at shareholders without consideration for the future, or, in the cartoon example, destroying the planet, is it really providing them the best value? There is no universal definition of shareholder value, legally or otherwise. I'm a shareholder in many companies, and to me they should deliver me profits when it makes sense, take care of their employees, not harm the environment, not overspend, not cut corners on health or safety... it's a long list, really.
- mamurphy 3y ago
  This tweet has the cartoon: https://twitter.com/Benioff/status/549339156854214656?lang=en https://twitter.com/Benioff/status/549339156854214656?lang=e... I also found it at the New Yorker: https://www.newyorker.com/cartoon/a16995 https://www.newyorker.com/cartoon/a16995 I am unsure of the original source.
aceofspades19 3y ago
It's a legal duty in the sense that the CEO of Intel has to act broadly in the best interest of the company, ie. he would be in trouble if he made decisions on purpose just to make the company lose money. But there is no duty to maximize share price or profits at all costs no matter what. See: https://www.nytimes.com/roomfordebate/2015/04/16/what-are-corporations-obligations-to-shareholders/corporations-dont-have-to-maximize-profits https://www.nytimes.com/roomfordebate/2015/04/16/what-are-co...
p_l 3y ago
No. There was never a legal duty to maximize shareholder returns. There's a legal duty to not cheat shareholders by idiotic spending, pocketing the investment money, and the like. But there was never a duty to optimize returns to shareholders.
- qeternity 3y ago
  No. I never said maximize shareholder returns. You hallucinated that. I said that corporations exist for their shareholders. This is a legal fiduciary duty.
  - 1propionyl 3y ago
    > corporations exist for their shareholders The history of incorporation suggests the contrary. This attitude is backed up mainly only by 1980s-onwards neo-proprietarian ideology/faith/apologia. > This is a legal fiduciary duty. Much like use of fiduciary in the usual sense: not screwing over your shareholders is, yes. Not choosing the plan to maximize the right outcomes ("quality attributes" other than profit exist) after the right length (short or long?) time not being the best one? No.
  - p_l 3y ago
    Corporations exist to fulfill the purposes stated in their incorporation documents. Shareholders usually get some vote through the board, but they are secondary to the actual incorporation documents.

screwturner68 3y ago

It maybe considered the mainstream perception now but prior to Reagan/Greenspan that was not the mainstream perception. Knowing several Chicago School economists I can say that Friedman's ideas aren't as lauded as you might think and in practice often turn out to be disasters -I give you water in Chile as an example.

lemmsjid 3y ago
An excellent point and I agree.