So… Tech founders are now following the Facebook model: non-voting shares, enriching themselves, keeping most of the power
Everyone is done pretending to be the “good founder,” that ship seems to have sailed
Everyone is done pretending to be the “good founder,” that ship seems to have sailed
Define "better." Because it apparently doesn't include reducing carbon emissions [1] or increasing returns [2]. Nor, for that matter, creating and supporting the forum you're on.
[1] https://www.msn.com/en-US/news/topstocks/chevron-plans-big-l...
[2] https://corpgov.law.harvard.edu/2016/12/23/a-successful-case...
Picking and choosing examples that do not generalize to most investors does not refute his point.
There is research on dual-class firms. "Excess insider control is associated with decreased overall [corporate social responsibility] ratings," with the "community and employee dimensions...display[ing] the strongest negative association with excess insider control" in firms not in "the top decile or quartile of firms with respect to their cash and cash equivalents, operating cash flow, and free cash flow" [1].
Outside the limited case of technology company founders and family-owned firms, the evidence is strongly in favor of investor-controlled companies over the alternatives in virtually every dimension of "better."
[1] https://www.sciencedirect.com/science/article/abs/pii/S02784...}
https://corpgov.law.harvard.edu/wp-content/uploads/2016/12/C...
CP was languishing until Ackman fired their CEO in 2011 and put Hunter Harrison at the helm.
Did pay go down? I don't think that's accurate.
Paying a bunch of excess employees, yes, that's not efficient. That's practically textbook inefficient.
Are we really on a forum run by a VC debating capitalism?
VCs destroy capitalism. They force out founders and install hired guns. The VCs and their hired guns break the promises made by founders to their stakeholders. They put insane pressure on growth at all costs. All business ethics are abandoned.
>In 2009, CP was awarded the Governance Gavel Award for Director Disclosure by the Canadian Coalition for Good Governance. Then, in 2011, CP ranked 4th out of some 250 Canadian companies in the Globe & Mail Corporate Governance Ranking.
Enron was named "America's Most Innovative Company" by Fortune for six consecutive years, from 1996 to 2001.
Enron Chief Executive Kenneth Lay received the Marco Polo Award in 1999, one of the highest awards given to entrepreneurs and innovators.
Enron finance chief Andrew S. Fastow received the Excellence Award from CFO magazine in 1999.
If you count all the times a major oil company made a climate-worsening choice because investors demand profits, and then count the choices like the one you point at, I'd expect it would be 99.9% the former.
And I'll note that the link you give does not include actually "reducing carbon emissions". They're promising to invest more in research. How will they pay for that? Selling more oil. So even if they do the research and even if something comes of it, there's no particular reason to think that on net this choice will reduce total atmospheric carbon.
Sorry, do non-market economies have a better track record when it comes to the environment? Eastern Europe says no [1]. Pollution intensity metrics relative to private property rights say no [2].
I cherry picked examples for narrative value. I didn't realize what I took to be an extremist claim--the less influence investors have over private companies the better--had so much purchase.
[1] https://documents1.worldbank.org/curated/en/8074414933055888...
[2] https://mpra.ub.uni-muenchen.de/48717/1/MPRA_paper_48717.pdf
Eastern Europe is (or at least was) worse because the problem -- elites extracting wealth regardless of consequences to others -- was worse there. But it's not like self-interested elites capturing both economic and regulatory problems isn't a problem here. Indeed, in now might be worse here.
The two choices available aren't eco-collapse in the 1980s American greed-is-good capitalism style or the 1980s Eastern Europe totalitarian style. There are more things, Horatio. But if you spend all your time cherry-picking citations to soothe your fundamentalist capitalism feelings, you're not going to see them.
These are separate questions; the solution to greenhouse gas emissions is globally-enforced taxes on emissions with the tax used to reverse the emissions.
For those interested in the topic, I recommend reading "A Lapsed Anarchist's Approach to Building a Great Business". [1] Years ago a grad student went to the University of Michigan to study their large collection of anarchist literature. As a sideline, he started the now-legendary Zingerman's Deli. Over the years, it spun off a large collection of associated businesses, each run by some of the workers. Lots of interesting ideas, ones backed by real-world success.
'1] https://www.zingermans.com/Product/zingermans-guide-to-good-...
Worker-owned companies exist: they're called partnerships. Just add a line requiring all employees be shareholders so the partners can't hire staff. Lots of construction companies are organized like this. (Wholly employee-owned firms were more popular before WWII [1].) I don't see any evidence that they pursued profits less furiously than investor-owned competitors.
ESOPs have been more successful [2]. Outside the domain of highly-skilled artisans, it turns out most employees--like most shareholders--don't want to do the work of being an investor. That results in the sort of clubbiness that will be familiar to anyone who has been involved in small-town politics.
[1] https://heinonline.org/HOL/LandingPage?handle=hein.journals/...
[2] https://hbr.org/1987/09/how-well-is-employee-ownership-worki...