1615
Everything's fine. Nothing to see here. (thelemmy.club)
submitted 6 months ago* by to c/fuck_ai@lemmy.world
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[–] 11 points 6 months ago (15 children)

The board room is more concerned with the presentation than the data, because presentations make sales.

What a lot of people fail.to understand is that for the C-Suite, the product isn't what's being manufactured, or the service being sold. The product is the stock, and anything that makes the number go up in the short term is good.

Lots of them have fiduciary duties, meaning they're legally prohibited from doing anything that doesn't maximize the value of the stock from moment to moment.

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  • [–] 19 points 6 months ago (2 children)

    Someone please show me the criminal lawsuit against the CEO that made the moral decision and the stock went down! I'm so sick of the term fiduciary duty being used as a bullshit shield for bad behavior. When Tesla stock tanked because musk threw a Nazi salute, where were the fiduciary duty people!?

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  • [–] 9 points 6 months ago (1 child)

    Further, as you hinted, long term is not their problem. They get a bump, cash in a few million dollars worth of RSUs, and either saddle the next guy with the fallout, it of they haven't left yet "whoopsie, but I can blame the LLM and I was just following best practices in the industry at the time". Either way they have enough to not even pretend to work another day of their life, even ignoring previous grifts, and they'll go on and do the same thing to some other company when they bail or the company falls over.

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  • [–] 9 points 6 months ago

    At the moment, nothing will be done. There's no way the current SEC chair will give a fuck about this sort of stuff.

    But assuming a competent chair ever gets in charge, I expect there to be a shit show of lawsuits. It really doesn't matter that "the LLM did it" lying on those mandatory reports can lead to big fines.

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  • [–] 8 points 6 months ago* (8 children)

    Lots of them have fiduciary duties, meaning they’re legally prohibited from doing anything that doesn’t maximize the value of the stock from moment to moment.

    Overall, I agree with you that stock price is their motivation, but the notion of shareholder supremacy binding their hands and preventing them from doing things that they want to otherwise do is incorrect. For one, they aren't actually mandated to do this by law, and secondarily, even if they were -- which to reiterate, they aren't -- just about any action they take on any single issue can be portrayed as them attempting to maximize company value.

    https://pluralistic.net/2024/09/18/falsifiability/#figleaves-not-rubrics

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  • [–] 1 point 6 months ago (7 children)

    No, not illegal, but they can be sued by the shareholder for failing to maximize value.

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  • [–] 5 points 6 months ago* (2 children)

    Sure, but since it's an unfalsifiable proposition, good luck proving it in court for any specific action.

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  • [–] 2 points 6 months ago (3 children)

    Not really, no. This is mostly a myth. Unless the executives are deliberately causing the company to lose money, they really can't be sued based on this fiduciary duty to shareholders. They have to act in the shareholders' best interest, but "shareholder interest" is entirely up to interpretation. For example, it's perfectly fine to say, "we're going to lose money over the next five years because we believe it will ensure maximum profits over the long term." In order to sue a CEO for failing to protect shareholders, they would have to be doing something deliberately and undeniably against shareholder interest. Like if they embezzle money into their own bank account, or if they hold a Joker-style literal money burning.

    If it were that easy to sue executives for violating their fiduciary duty to shareholders, golden parachutes and inflated executive compensation packages wouldn't exist. But good luck suing a CEO because he's paid too much. He can just claim in court that his compensation will ensure the company attracts the best talent to perform the best they can.

    Executives are given wide latitude in how they define the best financial interest of shareholders. Shareholders ultimately do have the ability to remove executives from their positions. This is supposed to be the default way of dealing with incompetent executives. As shareholders already possess the ability to fire a CEO at any time, there is a very high bar to clear before shareholders can also sue executives. It's generally assumed if they really are doing that bad a job, you should just fire them.

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  • [–] 1 point 6 months ago (2 children)

    Yes, that's correct, it's not an issue of legal liability, it's an issue of their interests converging. the CEO holds stock, he is a stock holder, and the execs are stock holders, they don't need any motivation to put the stocks first, they know where their interests converge, and precious few executives make more money in salary than they take away in stocks, in practicality, every corporation that offers stocks is stock focused, the is why we had daily and weekly meetings in retail stores on the absolute bottom of the ladder to talk primarily about stock prices, and why the main information displayed on price guns is the sale price/cost/ current quarter sales/last quarter sales/and last year to date quarter sales, and the sales numbers daily/monthly/quarterly are what you see posted around the office, it's always about beating last year to date numbers, and last quarter's numbers, and what always drove me fucking nuts is that the store made TWENTY TWO MILLION FUCKING DOLLARS in profit, but "your store is failing because you didn't make twenty two million and one penny. they don't care that we were making money hand over fist, because that's not the game. that game is dead. don't worry. they'll still cut payroll, and you can't like... spend that money or keep that money, but it doesn't matter. it only maters if it makes the stocks move. it's stocks all the way down. because that's where the interests converge. also as a side note, golden parachutes are an internal security measure against hostile take over, it means if someone does successfully raid your business and performs a hostile takeover, they have to pay your executives staff when they fire them and loot the company more money than the company could be looted for. it's never actually intended to be paid out.

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  • [–] 7 points 6 months ago

    it's why capitalism is over. they do not care about making a profit at all. they only care about the stocks. there is only one outcome to this approach, and that's dissolving the company slowly until it fails because your willing to saw your legs off for a small spike in quarterly earning. You eventually run out of legs to saw off.

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