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by prebrov 2442 days ago
Why not? Markets are interested in capital gains and profit sharing, not necessarily steering the wheel directly.

How is it wrong for a founder to take a smaller cut of the profit in exchange for more power?

Founders (individuals) want a voice in their companies, and how much money does one need anyway? Investors (usually institutions) want to make money, and they need lots of it.

Seems like a fair trade.
1 comments
michaelt 2442 days ago
If a dual-class share structure allows the CEO to divert 100% of dividends into his personal bonus, and prevents investors from having him removed even if he does, why wouldn't he?

Does an investment with those properties sound like a good investment to you?

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adventured 2442 days ago
> If a dual-class share structure allows the CEO to divert 100% of dividends into his personal bonus

> Does an investment with those properties sound like a good investment to you?

It's plainly obvious you don't hold an investment in a public company that does that. Your setup has a self-correcting action: the investors sell if they can't derive the expected benefit from owning the stock because the CEO is sending all the profit into their own bank account.

Why doesn't Zuckerberg do it for example? Because the stock would implode by 90%+ overnight and the best employees would immediately flee as they see their stock become worthless and future stock compensation goes to zero. Then the rest of the corporation would collapse in time without the employees required to keep it operating at a high level. Even monopolies can easily lose their position. Just downgrading your average employee by one grade, eg from a B to a C, will collapse elite tech companies over time. History is littered with examples (from HP to IBM) of what happens to companies when they can no longer attract the best.

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Ericson2314 2442 days ago
The concrete point in the above is that that employees vested with stock would rebel. But of the employees weren't so vested yes Zuvk could go do that. I would rather he did to teach people this multi class stock business is silly.
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