Sorry, I meant it to mean that the CEO represents the interests of the employees in that the employees do well as the company does well. Yeah, they get less of the yield than those at the top, but if the company isn't doing well it puts downward pressure on all of their careers. Presumably the employees are there because they support, or are at least neutral, to the goals of the company, and thus share an interest. If they oppose the goals of the business, while I can understand why they might take a job there, I would still argue it's an ethical lapse.
Exactly. My main problem is that the CEO's stance is entirely hypocritical, because he would demand real equity or quit (probably even faster) if he was in the employee's position.
Once you have access to millions in funding its tough to see people who have to work for a living as human just like you. You expect them to lovingly accept terms that you would be insulted at.
Now if your talent is so great that you dwarf all your employees it might be justified. But when you are pained at losing productive workers chances are your favorable terms exist mostly because of your connections.
It's merely an explanation that fits with my experience. By all means you are welcome to live your life in a way where you depend on company management to benevolently set aside the interests of the company in order to help you or anyone else out. Let me know how that works out for you.
I'm only saying that executives make decisions amorally with regard to what helps or hurts their company. I'm not suggesting they are all serial killers.
In this case we really aren't talking about a cut and dry example of putting workers over shareholders. The company has seen significant increases in value over time. It's a pretty difficult sell to say a CEO is hurting the company while also creating as much value as he was for the shareholders. These are boardroom disputes not courtroom disputes.
They are competing for people to run their company? Relevant experience and skill set? Just like any other job?
My point is, if you have two companies, A and B. A is on a downward slope for the past few years and needs a turnaround. Company B is on the uphill slope and is going to be a unicorn.
Just because Company A is doing poorly, doesn't mean they can pay their CEO less. Why? Because the potential hires could always just go to Company B.
Perhaps the point being made was that the individual motives/goals of the employees are irrelevant to assessing the overall motives of the company as a whole. Personally I'd say it's whatever the CEO's goals are, but shared agency is a weird thing.
This could lead to CEOs that make decisions to make people happy and get elected, rather than for the good of the company. These are sometimes two different things.
That’s mythology: executives have no such obligation to either shareholders or the board because business decisions are very rarely unambiguous wins or losses, and a great deal of discretion is given to their judgement over any non-trivial timeframe.
Consider, for example, the number of people who thought turn of the century Apple should become a Windows reseller or, later, sell the iPod brand to a business which understood how to be successful in the phone market like Nokia. There were certainly times where that could have generated a great deal of short-term gain, and it was easy to find some analyst prattling on about why they had to do it.
In the case of Spotify, the only situation where 17% of their company is an unambiguous waste of money with no benefit to the future business should be accompanied by the CEO’s resignation because that would be an enormous managerial failure in the hiring process. Since it seems unlikely that even 1% of their workforce is that bad, it’s far more likely that this has nothing to do with long-term success and everything to do with pleasing the activist investors and consulting firms who’ve been pushing the idea of layoffs as a way to remind workers not to ask for more.
The CEO doesn't have a grip on the employees' motivation, couldn't set convincing evaluation standards, and couldn't come up with a system that doesn't conflict company goals.
I'm not entirely certain that's the motive... I mean, as a CEO it is your responsibility to do what is best for the _company_. If you can save the company a lot of money in wages and prevent top talent from leaving then it's your responsibility to do so.
Not that I think what they did is ethical or legal, but I'm not entirely sure that greed is the motive here.
> Him getting a raise is a result of employees losing.
it's not a direct relationship.
The CEO gets a pay rise if the board believes it to be something worth doing - for example, rewarding the CEO for doing something unpopular (and taking flak for it).
The employees "losing" isn't a cause, it's an effect. The company needs to lower costs, and do some layoffs, in order to make it more profitable. And if a company is more profitable, the CEO is doing it's job. A company doesn't look out for employees; at least only up to the extend where the employees make them money.
And many CEOs run multiple companies and is part of several boards of other companies.
Why is it suddenly unethical for a mid level, much less paid employee to do so?
I suspect this would result in a lot of companies being run into the ground, as executives would focus on keeping employees happy at the cost of the business. "Vote for me, and everyone gets a raise and a bonus!"
When the interests of employees are put ahead of the success of the company, in the long run the employees end up losing because the company will fail, or at least need to lay people off.
Also, most employees simply aren't capable of understanding or judging executives more than a few levels above them. I'd hate to work somewhere where the junior devs get to pick the engineering directors, for example.
The CEO is elected by a board and the board is chosen by shareholders. If the board and CEO don't perform they can be fired.
The threat of termination is what causes someone "typical" to act "atypically." Survival instincts kick in, and anything goes.
Or you could be right. The CEO in such a position refuses to act immorally and is than fired by the shareholders for not hitting performance metrics. They then hire another and another... until they find a CEO willing to throw away his morality to hit those performance numbers.
> There is personal risk. If the CEO does a poor job they might not be hired again or have other career impacts. There are numerous Fortune 500 CEOs that have a negative reputation that impacts their future earnings.
And if I do a shit job I might have trouble getting hired too, but I'm not paid millions for it.
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