[email protected] (Shmuel Metz , Seymour J.) writes: > If your bonuses are based on 90 day cash flow, what are you going to > optimise? As long as corporate decisions are driven by short term > fluctuations in the stock prices, you are going to see decisions with > adverse long-term consequences.
published earlier this month http://www.amazon.com/Who-Stole-American-Dream-ebook/dp/B007MEWAX2/ has a number of quotes from former IBM vp (and head of research) Ralph Gomory ... like loc.4213-16: In this new era of globalization, the interests of companies and countries have diverged. In contrast with the past, what is good for America's global corporations is no longer necessarily good for the American people. -- RALPH GOMORY, former IBM vice president ... snip ... has some amount on executive compensation and bonuses have become misaligned with long-term corporate and public interest. there are some number of stories about executives becoming myopicly focused on managing the quarterly reports to exclusion of running the company. there is folklore that after the company went into the red in the early 90s ... that the several hundred top executives on the executive bonus plan focused solely on moving expenses from the following year to the year in the red (w/o regard to any consideration of actually running the company). The issue is that put the company slightly out of the red the following year and the way the bonuses were calculated as change from previous year, that year's executive bonus was more than twice as large as the largest bonus ever paid (i.e. the executives actually made more money than if the company hadn't gone into the red). In the late 70s & early 80s I was blamed for online computer conferencing on the internal network (larger than arpanet/internet from just about the beginning until late '85 or early '86). There was some amount of discussion about the rise of MBAs and the need for common, generic, simplified measurement criteria ... allowing MBAs to run companies w/o actually needing to know what the company does ... was leading to the downfall of US business. -- virtualization experience starting Jan1968, online at home since Mar1970 ---------------------------------------------------------------------- For IBM-MAIN subscribe / signoff / archive access instructions, send email to [email protected] with the message: INFO IBM-MAIN
