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The reason is Wall street. If Tim Cook invests heavily in R&D, earnings will tank and then activist investors will replace him to boost dividends and buy backs.
by gitah 11y ago
The reason is Wall street. If Tim Cook invests heavily in R&D, earnings will tank and then activist investors will replace him to boost dividends and buy backs.
Google can get away with this as the CEO has a lot of credibility and also class B voting shares.
- jnbiche 11y agoThat's entirely it. IBM is in a similar situation now, where the CEO knows she has to spend some of their massive savings to survive, but is getting major pressure from Wall Street to cut costs and up dividends and stock price. Not sure why you were downvoted for this observation.
- sumedh 11y agoI dont think you can blame Wall Street for IBM's performance. Buffett is a big investor in IBM, if the CEO wants she can use Buffett's influence to keep wall street at bay.