5 ms·

Public shareholders value "short term goals" over everything else including ethics, legality, fairness, product quality, long-term viability, R&D, worker compen

Public shareholders value "short term goals" over everything else including ethics, legality, fairness, product quality, long-term viability, R&D, worker compensation, work-life balance, etc.

golergka 11y ago
OK, that's their fair right to do so. It's not their responsibility to worry about these things, thank g-d. If you think that they don't serve their own self-interest, plead to them. If you think that they right to manage their property should be limited for public good, develop straight and clear guidelines about that.
- dhimes 11y ago
  It's possible that not all shareholders are aligned. As with employees with stock: people who want to cash out quickly will want short-term gains, screw the future. People who want to keep their stock for a while will want long-term gains, even at the expense of the short-term gains.
  - golergka 11y ago
    Of course they aren't. Why should they be?
    - dhimes 11y ago
      they just need to communicate their priorities to that manager Nobody said they should be, silly. But writing like this implies that the writer thinks so. Otherwise ("they communicated their varied and opposing priorities to their manager who was more confused than ever") the point is lost.
      - golergka 11y ago
        No, it doesn't. Don't you know that groups of people can have different opinions and still clearly communicate these opinions, proportionally to how they are distributed in the group? That's one of the basic building blocks of modern societies, starting with the whole concept of democracy.
        dhimes 11y ago
        So the manager proportionally invests in short-term or long-term value? Or sticks to his/her original vision for the company, in some proportion? I'm struggling to make sense of that. As with our political leaders, the manager made a decision. In his case it was based on his board interaction. He can certainly be judged based on his decision. Just allowing him to wash his hands of it and simply say "I'm doing what I'm told" is way too straightforward in a situation in which there is nuance. [I'm referencing here your comment in which you expressed gratitude to a deity that managers didn't have to worry about things like (quoted from comment you responded to) "ethics, legality, fairness, product quality...".] Perhaps ethics and fairness shouldn't be lumped with legality and product quality. I don't know how to measure ethics and fairness; I don't really know how to hold a manager accountable for those unless it's written in SOPs or bylaws somewhere (B-Corp?). FWIW, I find the article entertaining in the same way I find pre-game sports analyses entertaining. Time may tell us whether this decision was a short-term or long-term decision. I'm not convinced that Qualcomm actually 'succumb[ed] to the cult....'" But I find the idea that activist investors can come along and screw up a good thing for their personal short-term benefit and the other stakeholders are for all practical purposes powerless against it frightening. But, hey, it's a scary world.
  - yummyfajitas 11y ago
    Those folks who want long term gains are free to sell their shares at inflated prices (remember, share buybacks are happening) and spend the money on a position in a semiconductor company focused on the long haul.
    - dhimes 11y ago
      Of course they are free to leave, my point addresses the case in which they want to stay in this company and direct this company for the long haul.
      - yummyfajitas 11y ago
        It's very true that in any group of multiple people with multiple goals, some folks won't be able to get their way. Similarly, if Qualcomm decided to make long term investments, the short termers couldn't get what they wanted. That's one of the beautiful things about shareholder democracy in liquid, public markets - exit is always an easy option. (Compare and contrast to, e.g., political democracy, where exit is highly costly and sometimes impossible.)
        dhimes 11y ago
        Well, shareholder exits can be costly too. But this discussion and the one with golergka inspired the following idea (probably because the idea of political democracy came up in both threads). Stay with me here. It's not fully fleshed out- just kind of a spark: What if, in some fair way I don't know yet, the employees of a public company had some (40%? 51%? I don't know but significant) power to force a shareholder to sell his or her share of the company in a short time frame (30 days?). This would bring the analogy to political democracy a little closer because the "subjects" would have the direct power to throw out their "governors." We could argue that they have the indirect power now (especially in small companies), but this would make it explicit. Batshit crazy?
        yummyfajitas 11y ago
        That is pretty crazy. Similarly, imagine if X% of your SAAS vendors could vote to buy your shares - if Google and Amazon like your business, and if you use gmail + AWS, they can vote to buy you out and you've got no say in the matter. Employees aren't "subjects" and their boss isn't their governor. Shareholders are owners, that's why they get a vote. Employees, SAAS vendors, janitorial service companies, etc, are just people selling stuff.

Public shareholders value "short term goals" over everything else including ethics, legality, fairness, product quality, long-term viability, R&D, worker compensation, work-life balance, etc.

golergka 11y ago

OK, that's their fair right to do so. It's not their responsibility to worry about these things, thank g-d. If you think that they don't serve their own self-interest, plead to them. If you think that they right to manage their property should be limited for public good, develop straight and clear guidelines about that.

dhimes 11y ago
It's possible that not all shareholders are aligned. As with employees with stock: people who want to cash out quickly will want short-term gains, screw the future. People who want to keep their stock for a while will want long-term gains, even at the expense of the short-term gains.
- golergka 11y ago
  Of course they aren't. Why should they be?
  - dhimes 11y ago
    they just need to communicate their priorities to that manager Nobody said they should be, silly. But writing like this implies that the writer thinks so. Otherwise ("they communicated their varied and opposing priorities to their manager who was more confused than ever") the point is lost.
    - golergka 11y ago
      No, it doesn't. Don't you know that groups of people can have different opinions and still clearly communicate these opinions, proportionally to how they are distributed in the group? That's one of the basic building blocks of modern societies, starting with the whole concept of democracy.
      - dhimes 11y ago
        So the manager proportionally invests in short-term or long-term value? Or sticks to his/her original vision for the company, in some proportion? I'm struggling to make sense of that. As with our political leaders, the manager made a decision. In his case it was based on his board interaction. He can certainly be judged based on his decision. Just allowing him to wash his hands of it and simply say "I'm doing what I'm told" is way too straightforward in a situation in which there is nuance. [I'm referencing here your comment in which you expressed gratitude to a deity that managers didn't have to worry about things like (quoted from comment you responded to) "ethics, legality, fairness, product quality...".] Perhaps ethics and fairness shouldn't be lumped with legality and product quality. I don't know how to measure ethics and fairness; I don't really know how to hold a manager accountable for those unless it's written in SOPs or bylaws somewhere (B-Corp?). FWIW, I find the article entertaining in the same way I find pre-game sports analyses entertaining. Time may tell us whether this decision was a short-term or long-term decision. I'm not convinced that Qualcomm actually 'succumb[ed] to the cult....'" But I find the idea that activist investors can come along and screw up a good thing for their personal short-term benefit and the other stakeholders are for all practical purposes powerless against it frightening. But, hey, it's a scary world.
- yummyfajitas 11y ago
  Those folks who want long term gains are free to sell their shares at inflated prices (remember, share buybacks are happening) and spend the money on a position in a semiconductor company focused on the long haul.
  - dhimes 11y ago
    Of course they are free to leave, my point addresses the case in which they want to stay in this company and direct this company for the long haul.
    - yummyfajitas 11y ago
      It's very true that in any group of multiple people with multiple goals, some folks won't be able to get their way. Similarly, if Qualcomm decided to make long term investments, the short termers couldn't get what they wanted. That's one of the beautiful things about shareholder democracy in liquid, public markets - exit is always an easy option. (Compare and contrast to, e.g., political democracy, where exit is highly costly and sometimes impossible.)
      - dhimes 11y ago
        Well, shareholder exits can be costly too. But this discussion and the one with golergka inspired the following idea (probably because the idea of political democracy came up in both threads). Stay with me here. It's not fully fleshed out- just kind of a spark: What if, in some fair way I don't know yet, the employees of a public company had some (40%? 51%? I don't know but significant) power to force a shareholder to sell his or her share of the company in a short time frame (30 days?). This would bring the analogy to political democracy a little closer because the "subjects" would have the direct power to throw out their "governors." We could argue that they have the indirect power now (especially in small companies), but this would make it explicit. Batshit crazy?
        yummyfajitas 11y ago
        That is pretty crazy. Similarly, imagine if X% of your SAAS vendors could vote to buy your shares - if Google and Amazon like your business, and if you use gmail + AWS, they can vote to buy you out and you've got no say in the matter. Employees aren't "subjects" and their boss isn't their governor. Shareholders are owners, that's why they get a vote. Employees, SAAS vendors, janitorial service companies, etc, are just people selling stuff.