Maximize shareholder wealth to me suggests a staggering amount of grey area. I don't have time to read the URL you posted at the moment (though I will - thanks for adding it), but maximizing shareholder wealth needs to be defined over what timeframe.
It's a piece of cake to maximize shareholder wealth over one quarter, even if it damages subsequent quarters, and I think an awful lot of businesses do that at the moment. The great companies (and I'm thinking Apple here) see the bigger picture and their shareholders make way more in the long term.
Maximize shareholder wealth to me suggests a staggering amount of grey area. I don't have time to read the URL you posted at the moment (though I will - thanks for adding it), but maximizing shareholder wealth needs to be defined over what timeframe.
It's a piece of cake to maximize shareholder wealth over one quarter, even if it damages subsequent quarters, and I think an awful lot of businesses do that at the moment. The great companies (and I'm thinking Apple here) see the bigger picture and their shareholders make way more in the long term.
You're right, the point about "over what horizon" -- over the short run or the long run -- is a hugely important and non-trivial one. Under the assumption of markets being efficient, the distinction disappears. But as we all know, there are limitations to that assumption.
Indeed, US corporate law has grappled with this issue over dozens of cases over the past 90 years. Happy to give you a couple of fabulous cites that trace the history of this, if you PM me.
All this FUD. What are you trying to do? Depress the stock price so you can short it?
Really, nobody has any idea what the board has been like and what they will be like in the future. These and other analysts had absolutely no say in how Apple was run when Steve was there, and they have no say now. Making suggestions or offering advice means squat to Tim and the board. They'll run it they way they see fit, period.
Historically it's true. As somebody else said, shareholders have little long-term interest in companies. I'm sure Apple will be fine for some time to come, but if they're not, it'll almost certainly be something the board does in the interest of major shareholders looking for short-term profit.
What will be interesting to see if they appoint Tim Cook as the Chairman of the Board or not. Many CEOs hold both titles. Bringing in someone new could really create issues down the road.
using their products i'm sure the development cycle is to list a bunch of features that people want. prioritize them and ship each version with the most important features
Apple is now the most valuable company in the world - but somehow the board needs to mix things up, and start playing a greater role in the running of the company?
A recipe for disaster.
Apple didn't get to where it is due to a meddling, over-involved BOD.
The Board needs to offer all it's support to Tim and his team, and then stand back and refrain from fucking things up.
Absolutely agree! The system at Apple works. As long as it continues to work, and continues to respond to changes in the market with effective strategies and actions, no one needs to change how the board works. It's bad enough that a new board chairman will need to be chosen. (Tim Cook is not the logical choice as he has yet to earn that status.) Whoever is chosen to replace Jobs needs to be highly qualified as visionary in their own right yet not have the ego that normally goes with that.
The real risk is that Apple changes in the way other, formerly well run companies have, by taking a well run and successful business model and losing sight of what mad them successful by tweaking it.
Ummm......."all that cash" belongs to the shareholders.
Who would the owners of the company be in your scenario?
Cash can be used to buy back shares. The company would belong to whoever puts up the rest of the money. In this scenario it'd be a group of private investors interested in technology and the long-term prospects of the company. It's not really a realistic scenario because of the amount of money involved, but I can dream.
You're allowed an opinion though you know. Freedom of speech and all that.
I'm allowed an opinion too.
It depends on lots of factors. If, for example, there is a spike in commodities prices, then the shareholders may want to get all the resource out of the mine IMMEDIATELY, even if it will reduce some small chance of greater long-term profits.
OTOH, if a start-up fails to get as much money in the door as quickly as possible, they might lose market cap and become a takeover target for bottom feeders to break up, losing the HUGE potential that might have been right around the corner.
Making blanket statements about what other people should do with their companies is not something I am intertested in doing. Apple's owners, who are Hedge Funds and other big money Wall Street types will decide how best to proceed. They might want to keep up the growth company model, they might want to start paying dividends or initiate a stock buy-back, they might want to diversify into areas other than mass-market consumer products.
If I were the owner of Apple, and I just lost my most talented employee, I would look for advice from seasoned businessmen. I would start with the current BOD, see what they had to say, and would make decisions based upon their advice and the advice of other trusted advisors.
Ummm......."all that cash" belongs to the shareholders.
Who would the owners of the company be in your scenario?
The cash does not belong to the shareholders. That's a common myth that should be dispelled. Shareholders own shares in the company, not its assets. There's a difference - a huge one.
It is possible that shareholders have certain rights with respect to the assets of a corporation. But what those rights are depend on the SHA and on agreements in place with other stakeholders (shareholders are not the only stakeholders). Generally speaking, that only becomes an issue in case of liquidation. Even then, what the shareholders get varies greatly from company to company.
Cash can be used to buy back shares. The company would belong to whoever puts up the rest of the money. In this scenario it'd be a group of private investors interested in technology and the long-term prospects of the company. It's not really a realistic scenario because of the amount of money involved, but I can dream.
Please do not use cash to buy back shares. Please.
It is one of the most shortsighted but unfortunately common corporate tactics.
Apple is now the most valuable company in the world - but somehow the board needs to mix things up, and start playing a greater role in the running of the company?
A recipe for disaster.
Apple didn't get to where it is due to a meddling, over-involved BOD.
The Board needs to offer all it's support to Tim and his team, and then stand back and refrain from fucking things up.
Absolutely true. Theoretical, textbook definitions of CEO/Board relationships are just that - theoretical. What goes on behind closed doors, is how a company really works for good or for bad.
Apple is now the most valuable company in the world - but somehow the board needs to mix things up, and start playing a greater role in the running of the company?
A recipe for disaster.
Apple didn't get to where it is due to a meddling, over-involved BOD.
The Board needs to offer all it's support to Tim and his team, and then stand back and refrain from fucking things up.
Couldn't agree more.
Welcome to the world of Board members paying themselves millions for eating $16 cupcakes, and the complete bullshit that is Wall Street.
The cash does not belong to the shareholders. That's a common myth that should be dispelled. Shareholders own shares in the company, not its assets. There's a difference - a huge one.
It is possible that shareholders have certain rights with respect to the assets of a corporation. But what those rights are depend on the SHA and on agreements in place with other stakeholders (shareholders are not the only stakeholders). Generally speaking, that only becomes an issue in case of liquidation. Even then, what the shareholders get varies greatly from company to company.
Cool. That's gracious of you. Last time I made this point here on Appleinsider, I was lambasted by someone who refused to believe, accept, agree, admit ...
This has been one of the best threads in ages. Some different opinions expressed, for the most part in very good spirit - I've learnt a lot. Thanks everyone!
What better young visionary is out there who could continue the innovation that Steve Jobs has started?
I think Mr. Z should be a member of the board of directors and be given an opportunity to Chair one day. He is brilliant and tenacious and creative and ruthless and innovative and........
It's disney all over again. Damn. Hopefully this is just crazy media speculation, but a power grab for the worlds largest company is totally understandable. It needs to come from within the company and/or current board. Jobs knew what he was doing and if he wanted someone from outside of the company, he would have had that person already sitting in that seat. Apple doesn't need some outsider schmuck coming in and turning the company into HP.
Comments
No grey area at all: maximize shareholder wealth.
Also, it's pretty much the law in the US, starting in 1919 (see http://www.casebriefs.com/blog/law/c...ord-motor-co/; subsequently codified in ALI Principles, see, e.g., http://heinonline.org/HOL/Page?handl...ction=journals.)
Maximize shareholder wealth to me suggests a staggering amount of grey area. I don't have time to read the URL you posted at the moment (though I will - thanks for adding it), but maximizing shareholder wealth needs to be defined over what timeframe.
It's a piece of cake to maximize shareholder wealth over one quarter, even if it damages subsequent quarters, and I think an awful lot of businesses do that at the moment. The great companies (and I'm thinking Apple here) see the bigger picture and their shareholders make way more in the long term.
Maximize shareholder wealth to me suggests a staggering amount of grey area. I don't have time to read the URL you posted at the moment (though I will - thanks for adding it), but maximizing shareholder wealth needs to be defined over what timeframe.
It's a piece of cake to maximize shareholder wealth over one quarter, even if it damages subsequent quarters, and I think an awful lot of businesses do that at the moment. The great companies (and I'm thinking Apple here) see the bigger picture and their shareholders make way more in the long term.
You're right, the point about "over what horizon" -- over the short run or the long run -- is a hugely important and non-trivial one. Under the assumption of markets being efficient, the distinction disappears. But as we all know, there are limitations to that assumption.
Indeed, US corporate law has grappled with this issue over dozens of cases over the past 90 years. Happy to give you a couple of fabulous cites that trace the history of this, if you PM me.
All this FUD. What are you trying to do? Depress the stock price so you can short it?
Really, nobody has any idea what the board has been like and what they will be like in the future. These and other analysts had absolutely no say in how Apple was run when Steve was there, and they have no say now. Making suggestions or offering advice means squat to Tim and the board. They'll run it they way they see fit, period.
Historically it's true. As somebody else said, shareholders have little long-term interest in companies. I'm sure Apple will be fine for some time to come, but if they're not, it'll almost certainly be something the board does in the interest of major shareholders looking for short-term profit.
using their products i'm sure the development cycle is to list a bunch of features that people want. prioritize them and ship each version with the most important features
This is the dumbest shit I've ever heard.
Apple is now the most valuable company in the world - but somehow the board needs to mix things up, and start playing a greater role in the running of the company?
A recipe for disaster.
Apple didn't get to where it is due to a meddling, over-involved BOD.
The Board needs to offer all it's support to Tim and his team, and then stand back and refrain from fucking things up.
Absolutely agree! The system at Apple works. As long as it continues to work, and continues to respond to changes in the market with effective strategies and actions, no one needs to change how the board works. It's bad enough that a new board chairman will need to be chosen. (Tim Cook is not the logical choice as he has yet to earn that status.) Whoever is chosen to replace Jobs needs to be highly qualified as visionary in their own right yet not have the ego that normally goes with that.
The real risk is that Apple changes in the way other, formerly well run companies have, by taking a well run and successful business model and losing sight of what mad them successful by tweaking it.
If it ain't broke, they don't need to fix it.
Ummm......."all that cash" belongs to the shareholders.
Who would the owners of the company be in your scenario?
Cash can be used to buy back shares. The company would belong to whoever puts up the rest of the money. In this scenario it'd be a group of private investors interested in technology and the long-term prospects of the company. It's not really a realistic scenario because of the amount of money involved, but I can dream.
You're allowed an opinion though you know. Freedom of speech and all that.
I'm allowed an opinion too.
It depends on lots of factors. If, for example, there is a spike in commodities prices, then the shareholders may want to get all the resource out of the mine IMMEDIATELY, even if it will reduce some small chance of greater long-term profits.
OTOH, if a start-up fails to get as much money in the door as quickly as possible, they might lose market cap and become a takeover target for bottom feeders to break up, losing the HUGE potential that might have been right around the corner.
Making blanket statements about what other people should do with their companies is not something I am intertested in doing. Apple's owners, who are Hedge Funds and other big money Wall Street types will decide how best to proceed. They might want to keep up the growth company model, they might want to start paying dividends or initiate a stock buy-back, they might want to diversify into areas other than mass-market consumer products.
If I were the owner of Apple, and I just lost my most talented employee, I would look for advice from seasoned businessmen. I would start with the current BOD, see what they had to say, and would make decisions based upon their advice and the advice of other trusted advisors.
But it is not important what I would do with OPM.
Ummm......."all that cash" belongs to the shareholders.
Who would the owners of the company be in your scenario?
The cash does not belong to the shareholders. That's a common myth that should be dispelled. Shareholders own shares in the company, not its assets. There's a difference - a huge one.
It is possible that shareholders have certain rights with respect to the assets of a corporation. But what those rights are depend on the SHA and on agreements in place with other stakeholders (shareholders are not the only stakeholders). Generally speaking, that only becomes an issue in case of liquidation. Even then, what the shareholders get varies greatly from company to company.
Cash can be used to buy back shares. The company would belong to whoever puts up the rest of the money. In this scenario it'd be a group of private investors interested in technology and the long-term prospects of the company. It's not really a realistic scenario because of the amount of money involved, but I can dream.
Please do not use cash to buy back shares. Please.
It is one of the most shortsighted but unfortunately common corporate tactics.
This is the dumbest shit I've ever heard.
Apple is now the most valuable company in the world - but somehow the board needs to mix things up, and start playing a greater role in the running of the company?
A recipe for disaster.
Apple didn't get to where it is due to a meddling, over-involved BOD.
The Board needs to offer all it's support to Tim and his team, and then stand back and refrain from fucking things up.
Absolutely true. Theoretical, textbook definitions of CEO/Board relationships are just that - theoretical. What goes on behind closed doors, is how a company really works for good or for bad.
My bet is that they will reinstate Bill Campbell.
Panic is unwarranted. Relax, fanboyz.
This is the dumbest shit I've ever heard.
Apple is now the most valuable company in the world - but somehow the board needs to mix things up, and start playing a greater role in the running of the company?
A recipe for disaster.
Apple didn't get to where it is due to a meddling, over-involved BOD.
The Board needs to offer all it's support to Tim and his team, and then stand back and refrain from fucking things up.
Couldn't agree more.
Welcome to the world of Board members paying themselves millions for eating $16 cupcakes, and the complete bullshit that is Wall Street.
The cash does not belong to the shareholders. That's a common myth that should be dispelled. Shareholders own shares in the company, not its assets. There's a difference - a huge one.
It is possible that shareholders have certain rights with respect to the assets of a corporation. But what those rights are depend on the SHA and on agreements in place with other stakeholders (shareholders are not the only stakeholders). Generally speaking, that only becomes an issue in case of liquidation. Even then, what the shareholders get varies greatly from company to company.
Yes. I stand corrected.
Yes. I stand corrected.
Cool. That's gracious of you. Last time I made this point here on Appleinsider, I was lambasted by someone who refused to believe, accept, agree, admit ...
Cool.
I think Mr. Z should be a member of the board of directors and be given an opportunity to Chair one day. He is brilliant and tenacious and creative and ruthless and innovative and........
Thumbsucking.
It's disney all over again. Damn. Hopefully this is just crazy media speculation, but a power grab for the worlds largest company is totally understandable. It needs to come from within the company and/or current board. Jobs knew what he was doing and if he wanted someone from outside of the company, he would have had that person already sitting in that seat. Apple doesn't need some outsider schmuck coming in and turning the company into HP.