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You are forgetting a vital element: the C-suite must want to plow the money into research instead of lining their yachts and various houses with it.
by trelane 2y ago
You are forgetting a vital element: the C-suite must want to plow the money into research instead of lining their yachts and various houses with it.
- bumby 2y agoSomewhat less cynical view, but maybe corporations were allowed to be more long term focused in the past?
- ElevenLathe 2y agoOr maybe they had to be, with interest and tax rates what they were?
- bumby 2y agoCould you elaborate or be more specific? Given how long BL existed, I’m not sure I can pin down what rates you’re talking about
- gregw2 2y agoOne of the commenters on the original article said "Bell Labs was funded through a 1% tax on Bell's overall revenue, as well as a claim on a portion of Western Electric's revenue, so yes, AT&T was able to recoup Bell Labs' expenses." This would protect it from (at least certain types of) C-suite predation presumably.
- sneed_chucker 2y agoAT&T wasn't publicly traded until 1984, so there's a clue for you right there
- dogsgobork 2y agoBy 1984 AT&T had been listed on the NYSE for over 80 years.
- nik_0_0 2y ago“The American Telephone and Telegraph Company (AT&T) was listed on the NYSE on Sept. 4, 1901. Only 11 other companies have been listed longer than AT&T.“ Yeah, impressively wrong gp! 1984 was when they were broken up by Justice Department.
- hibikir 2y agoYou don't need to mandate a short term view when the executive's massive pay packages depend on stock valuations: They will chase the money all by themselves, not trying to build a company that might make major discoveries eventually
- skeeter2020 2y agoIt's not like corporate executives have carte blanche to make these decisions. They report to the board, who represent the shareholders, to whom they have a legal duty to maximize profits. The entire construct is set up to promote the alternative to building the next Bell Labs.
- bigstrat2003 2y agoThey don't have a legal duty to maximize profits, they have a legal duty to represent the fiduciary interests of the shareholders. If the company doesn't make as much profit next quarter but it will be healthier in the long run for it, that is perfectly OK.