4 ms·
Profit margins are low because they need to pay $20M in opex for the CEO’s bonus.
by darth_avocado 2y ago
Profit margins are low because they need to pay $20M in opex for the CEO’s bonus.
- asats 2y agoIf I'm not mistaken that's 0.08% of their revenue.
- ceejayoz 2y agoHe won’t be the only person getting a bonus. Or a fancy office conference table. Or offsite team building exercises in Hawaii.
- gruez 2y ago>Or a fancy office conference table Even smaller order of magnitude than executive comp >offsite team building exercises in Hawaii. Source this actually happens to an extent that would materially affect the balance sheet?
- ceejayoz 2y agoThey add up. Private plane: https://www.sfgate.com/business/article/executives-at-pg-e-hoping-to-fly-in-style-2535959.php https://www.sfgate.com/business/article/executives-at-pg-e-h... You hire your buddy’s company as a consultant or contractor, too. At a sweet rate.
- simoncion 2y agoOr larger-than-they-should-be-due-to-neglecting-essential-maintenance dividends to investors.
- toomuchtodo 2y agoWaste is waste. Squeeze it all out. Excessive management comp, share buybacks, dividends that could’ve been spent on infrastructure.
- s1artibartfast 2y agoProfit margins are set by the state utility control board. The board says 11% profit Max, so that is what all of the major utilities make. The challenge is that with a fixed profit percent, they have a heavy incentive to maximize open. You can spend $10 and make $1.1 or spend $100 and make $11. It's a very problem to the healthcare market. Health insurance also has fixed profit, therefore there is a huge incentive to drive up costs. Better to make 15% on a $10,000 drug then 15% on a $10 one.
- porridgeraisin 2y agoThis is the exact reason for the jacked up prices in many things.