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Shareholders care more about net profit than revenue. Using revenue makes the number more clickbaity. Also, you claim this isn't a deterrent, but you don't expl
by bitshiftfaced 3y ago
Shareholders care more about net profit than revenue. Using revenue makes the number more clickbaity. Also, you claim this isn't a deterrent, but you don't explain why. How do we know that tech companies weren't just well-behaved last year? Or, should one week's revenue never ever be able to pay off a company's past year's fines, and we should always assume tech companies are more evil than that?
- devsda 3y agoThey were fined for breaking laws and them making a profit out of the act is irrelevant and secondary(though its the main driver). If profit is the only benchmark then companies can use some creative accounting practices to reduce their exposure.
- deleted 3y ago[deleted]
- rollcat 3y agoI have a simple and very fair solution to that problem: make each consecutive fine for a repeated offense grow exponentially. If you make an honest mistake (or even are just testing the waters to see what you can get away with), the fine should be bearable. But being able to treat fines as just cost of doing business will indeed lead to a world where nothing is ever wrong or immoral, as long as you keep making money.
- arghwhat 3y agoProfit is an easier number to manipulate than revenue through expenses and liability. E.g., by increasing expenses to executive salaries and by investing huge sums in growth projects or new strategies. For large companies, particularly those where investors prioritize growth, cash flow is often more interesting than profit.
- bitshiftfaced 3y agoOh I agree that if you're going to fee based on something, revenue is better than profit. My post wasn't trying to say otherwise. It's just that I don't believe it makes sense to gauge how fast companies pay off the fee in terms of revenue, such as was done in the article.