this post was submitted on 19 Mar 2024
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I think that yes, the execs are greedy, but there are also two other problems:
Shareholders are also greedy, arguably even more greedy than company employees (executives are employees).
Developers have been overhiring, which is generally a symptom of someone not knowing what they are doing thinking that hiring more people makes things faster/better when actually the opposite is the case.
Out of touch, greedy executives that dont know what theyre doing, trying to meet unreasonable demands of shareholders? Yeah, perfect storm material.
But does execs gain bonuses based on what shareholders gains ? If yes, they are more likely to make more gain for the shareholders.
Yes, thats part if what I was talking about. The shareholders have unreasonable and unrealistic demands. Companies cannot infinitely have increasing profits year over year, but that is what shareholders demand. So the execs try to achieve those unreasonable demands, which results in overhiring because of course if more people work in a game then obviously the games will be done faster and better resulting in more profit, according to their thinking.
Im just saying that while executives are being greedy, they are only one cog in the machine.
Don't forget that executive compensation is often significantly comprised of stock or stock options. By feeding the shareholders, they're feeding themselves.
I think COVID is partially to blame here too. Specifically with the over hiring. A lot of companies took on too many people with the influx of cash caused by everyone staying home and playing games and when the market went back to level and everyone went back to work companies were left holding the bag for a bunch of employees that they realistically couldn't support and probably shouldn't have hired.
execs often hold good amounts of shares though, not sure what the point you're trying to make is. It's often in their benefit to make short-term decisions that make the stock price go up in a span of 1-2 years, then they can cash out and do the same somewhere else.
Considering execs usually are fired for ignoring shareholder demands, I would say regardless of how many shares execs have in a company, attempting to meet shareholder demands is always in their favor. This is irrelevant to the point I was making.
It's important to understand that this is not just individual greed. The problem is that greed is ingrained into the system. Capitalism simply does not function without greed.
The only reason shareholders will move their capital is if the company is expected to grow. What is the point in risking your money if there is no profit? This search for infinite growth is what leads to the death of products. It creates different objectives and incentives than simply making a good product that users will pay for and providing a steady job for employees. A situation where the company does not grow but continues to make a good product and pay its workers a decent wage is an acceptable one for everyone except for shareholders.
Executives are just the middle layer between investors and workers. They make sure that investors get their return on investment, since investors don't really give a shit about the product or even how it operates, they just care about the numbers on the balance sheet. And as someone noted in another comment, they are paid mostly in company stock so that the interests of shareholders become partially their own.