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Joined 1 year ago
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Cake day: June 9th, 2023

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  • The shareholders can go and buy a diversified portfolio on their own, by investing in many companies, so they can derisk their portfolio without conglomeration.

    If they already own shares of the conglomerating company, its returns will be lower (they don’t care that it’s less risky; they’ve diversified already). Similarly, the returns of the company that is now becoming part of the conglomeration will likely be reduced, which negatively affects shareholders of that company.

    The benefit is really only for the people whose prospects are deeply tied to this company, and only this company… its management employees, who are compensated by the company (often in the form of stock that they can’t sell till they leave, or that vests over a long time frame).








  • So… this is pretty stupid, a raise in pay certainly might help.

    However, from the perspective of a career spent managing teams, often organizations with hundreds of employees, if you think your people are all solely motivated by compensation, you’re going to do a very poor job as a manager.

    Everyone wants more money, but that’s not all they want – and there are plenty of people who quit high paying jobs that treated them poorly or gave them no opportunity to grow.

    Think about appropriate compensation as necessary, but often not sufficient – and think about the best boss you ever had. They probably did more than just pay you fairly, that’s the bare minimum.