How GE, GM, Coca-Cola and Kodak Put Shareholders Ahead of Employees | Hacker News Reader

How GE, GM, Coca-Cola and Kodak Put Shareholders Ahead of Employees

forbes.com

23 pointsmpweiher13 comments

The graph at the start of the article is terrifying: it basically says that since 1973, on average, there was no correlation between your productivity and your earnings. None. Work hard? No difference. Work longer? No difference. Work smarter? No difference. Firm introduces new working practices? No difference.

The people who started work in 1973 are now retiring. This means that this disconnect is not only true of everyone currently working, it's always been true for pretty much everyone they know or report to.

We've normalized a situation in which employees have no skin whatsoever in their company being a success. And then we wonder why the productivity figures are lackluster. Given that graph, I think it's amazing they're as good as they are.

But you get all the circus-money, the goudy extras... are you not happy having the parking space near the entrance, and the paper tuxedo...

To think of all the outrage that crashed down upon that poor soul on stack exchange who automated his job away and gambled the gamblers.

Kind of makes the corporate mission statement and team building exercises sting a little, doesn't it?

That's the point of corporations. To look out for the interest of the shareholders. It is the fiduciary duty of the Board of Directors to look out for shareholders' interests.

Also, I thought we had a rule against forbes here?

Whether or not you think it is moral to do so or not, it is those company's fiscal and legal obligation to put shareholders ahead of employees.

don't hate the players, hate the game.

Ahead is fine. But not to the point where employees are the fire to keep the shareholders warm. There are degrees in which shareholders' concerns should be a priority, but I'm afraid it's too much in the past 40 years.

Historically and even today, there's been plenty of variation in the _interpretation_ of that imperative. As the article says, the current behaviour is very much a pretty recent invention. We just act like it was always this way. Fiduciary responsibilities were just as well served in the fifties as they are now.

Why not hate both?

Maybe they should cut the executive pay ten fold to keep the fiscal obligations to shareholders?

it is those company's fiscal and legal obligation to put shareholders ahead of employees.

[citation needed]. Seriously, this is one of those things that keeps being repeated, without anyone stopping to go see if it's true before they parrot it elsewhere. It's a safe bet, right? It makes one sound clever, and enough people say it, it's probably true, right?

It's not.

> [citation needed]. Seriously, this is one of those things that keeps being repeated, without anyone stopping to go see if it's true before they parrot it elsewhere. It's a safe bet, right? It makes one sound clever, and enough people say it, it's probably true, right?

> It's not.

I am inclined to believe this rebuttal, but only because I've seen lots of people say it, which is no better a reason than for believing the original statement. Without doubting your statement, I hope I may ask non-snarkily if you have a citation (though I know we're in "proving a negative" territory" here).

(though I know we're in "proving a negative" territory" here)

If it's codified in law, it shouldn't be hard to find. I've looked, I can't find it. Hell, I can't even find the origins of where such a falsehood originated. So, to put it as non-snarkily as I can, I've put more time into the question than those that hold the statement as truth; my obligation is fulfilled.

EDIT: and to be clear, because someone always thinks themselves clever by bringing it up, this does not preclude shareholders from kicking the board's collective asses to the street. But that is a long way from "legal obligation".

Shareholders are the owners of the business. Lets say you owned a business and you hire a manager. Are you saying you expect the manager to put his employees interest ahead of your own? If you owned a dairy queen, are you saying the manager should keep terrible employees because he should put employees ahead of the shareholder who hired him?

Since you asked for sources.

Board Member/Shareholder

A similar fiduciary duty can be held by corporate directors, seeing as they can be considered trustees for stockholders if on the board of a corporation, or trustees of depositors if service as director of a bank.

http://www.investopedia.com/terms/f/fiduciary.asp

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