Anyone noticed crappy CEOS don't get fired?

Discussion in 'Economics' started by KINGOFSHORTS, Jun 10, 2011.

  1. Cisco for example, 80% of its share price down the tube.
    MSFT. 52% of its value down the tube.

    Yet both CEOs overseeing these companies during this tenure is still employed.

    I guess shareholders have no power.
  2. Rumblefish

    Rumblefish Guest

    Who cares about temporary hedge fund shareholders who just want to pump and dump stocks.

    many of the 'temporary shareholders' are not even shareholders they are 'stock speculators'

    management has no control over the stock market.

  3. Break all big corporations into smaller companies to create news jobs in the economy
  4. clacy


    It happens all the time that bad leadership is allowed to remain. And then when they do finally get fired, they are paid out massively.
  5. The problem is that these big Companies survive because of their size - they can bribe gov'ts for contracts, or to get lenient treatment on taxes, visas, etc....

    They can go into the public or private Markets and get loans in virtually any business cycle, or they can be bailed out when things go bad.. Somehow I doubt that any large enterprise is going to give that up in the name of "productivity" or "efficiency"
  6. That's because management does usually have at least 51% of the voting power (I don't know about those companies per-se).

    Realistically though, just because a stock is down 50% in a period - what if it would be up 50% next year? Who says it should be the CEOs goal to get the stock higher and higher every single year?

    Baseball players who have "potential" or had good years in the past often don't get "fired" either after one or even 4-5 bad years - they get a huge contract and the team prays they go back to the glory days.

    If a movie star is in a movie that flops, they are often still hired for the next movie, etc.

  7. Most CEO's are babysitters - they are put into a system that pre-existed and just suck the teet of the company. The executive staff pays them well because they know that when the time comes they can offer him up as the sacrificial lamb while the rest of them continue to suck the teet. He is, of course, handsomely rewarded not for his "failure", but for taking one for the rest of the team and allowing the company to go back to doing what it was doing before.

    Obviously, entrepreneurs are different. They take risks with their own fortunes and crash and burn more often than not.

    Once you are big enough to buy politicians, it's not about efficiency and productivity, but the power to remain inefficient or even operate with malfeasance, and stay dominant.
  8. Share holders fear to oust CEOs because of their connections.