> The problem is people who don't care about other people.
Agreed, but the idea that CEOs are somehow not part of this group is a bit bizarre, particularly when you consider that a large part of CEO compensation is often stock or stock options. You can't exonerate CEOs by blaming shareholders when CEOs are generally shareholders.
But think in terms of the goal you want to achieve. If your goal is to stop layoffs and convince the CEO to act in a different way that shareholders will not like, the CEO will be replaced. And you will not achieve the goal.
Again, the CEO is accountable to law and shareholders. Either you convince shareholders to change their mind or you change the law. That's it. Changing the mind o CEO makes no difference.
Well, if you're not trying to exonerate CEOs, saying "The problem is not CEOs. The problem is shareholders / owners" is a pretty strange thing to say. The CEO, as a person, made the decision; the CEO, as a person, is responsible for that decision. The CEO is the problem.
> Either you convince shareholders to change their mind or you change the law. That's it. Changing the mind o CEO makes no difference.
I'm not saying we should change the mind of CEOs, I'm saying we should change the law.
And changing the law to penalize CEOs who do harmful things is met with a lot of opposition, because of people saying stuff like, "The problem is not CEOs. The problem is shareholders / owners."
What's your proposed solution? It seems that you understand how incentives work, so I hope I don't have to explain why changing the minds of shareholders won't work.
>Well, if you're not trying to exonerate CEOs, saying "The problem is not CEOs. The problem is shareholders / owners" is a pretty strange thing to say.
No, it is not.
When I say the problem is not CEOs I mean they are not the problem.
If I am manager and I hire poor devs and they fuck up a project, who is to blame? Is it the poor devs who can't code or is it me who hired them?
Did you know CEOs are actually hired to do a job? Hired meaning somebody selected them and decided, "Yes, we want this guy to run the company we invested so much in."
Imagine half of CEO candidates being bad people, half being good ones. Imagine that shareholders will always chose the ones that will only care for their share value and this happens to be choosing bad people.
So what is really responsible here for the problem? Is it the CEO being bad person or is it shareholders choosing bad ones?
Think a moment? What needs to change so that CEOs have are better for their employees.
See the problem? Even if you convince 99% of CEOs to be good people it won't change an iota, because owners will still chose the ones that will further their investment value. Who you really need to go for is shareholders. Make them pay for not treating people right, make it not worth.
> And changing the law to penalize CEOs who do harmful things is met with a lot of opposition, because of people saying stuff like, "The problem is not CEOs. The problem is shareholders / owners."
No, don't go after CEOs. It will just create a new stack of perverse incentives.
Go after shareholders. Because if you make laying off people costly to them, I can guarantee there is not going to be any more layoffs.
> If I am manager and I hire poor devs and they fuck up a project, who is to blame? Is it the poor devs who can't code or is it me who hired them?
See, this is why blame isn't a particularly useful way to approach the problem. In all likelihood, both share some degree of blame.
> Imagine half of CEO candidates being bad people, half being good ones. Imagine that shareholders will always chose the ones that will only care for their share value and this happens to be choosing bad people.
Imagine we put the bad half in jail. Then nobody will be willing to perform massive layoffs, and shareholders will have to pick from the pool of good CEOs. This isn't complicated.
Actual jail time is a bit more extreme than necessary: proportional fines are more along the lines of what I think would be best.
> Who you really need to go for is shareholders. Make them pay for not treating people right, make it not worth.
The problem with going after shareholders is that not all of them are to blame for problems.
Shareholders simply don't have visibility into companies to be able to make informed decisions. Technically shareholders have the right to some degree of visibility, but if you own a diverse portfolio you're spread too thin. Consider the literally most common form of investing in stocks: buying an S&P 500 index fund--are you really of the opinion that it's shareholders' responsibility to be intimately aware of the goings-on of 500 different stocks?
Even if you put this responsibility on the fund manager, 500 stocks is a lot (and the problem is even worse with total market funds). Additionally, [index] fund managers hands are partially tied: they can vote in elections but they can't sell the stock because they have to conform to the index.
And ultimately, minority shareholders can't even meaningfully vote. In many (maybe even most?) companies, <10 individuals combined own controlling shares in the company, and usually vote together. Minority shareholders might vote against a bad decision, but they still get punished for them in your proposed solution.
And finally, it's a big assumption to believe that share price is actually an incentive to shareholders. For the larger shareholders of a company, the shares in a company have to be viewed in the context of their overall portfolio. There are situations where driving down the price of shares you own can be profitable. For example, if you own shares in competing companies A and B, you can buy put options against your own shares in B and then drive it into the ground. You lose money on your B shares, but that's more than compensated by your puts and the rise in price of A shares.
> No, don't go after CEOs. It will just create a new stack of perverse incentives.
Sociopaths will always find perverse incentives (such as the company A and B example above). Making changes many layers of abstraction away from the problems as you're proposing just increases the complexity of situations and makes it easier to find loopholes.
The CEOs are the ones who make the decision to lay people off. They should be held responsible for that decision. It's not even about blame, it's just about solving the problem in the most direct way possible.
Agreed, but the idea that CEOs are somehow not part of this group is a bit bizarre, particularly when you consider that a large part of CEO compensation is often stock or stock options. You can't exonerate CEOs by blaming shareholders when CEOs are generally shareholders.