Tim Cook Rejects Politics of the NCPPR • Hacker News Board

Re: Tim Cook Rejects Politics of the NCPPR

#81

Post by mathattack » Sat, Mar 01, 2014, 12:59 PM UTC

rjknight wrote: post #48

I understand and agree with the idea that companies should maximise shareholder value, but I've never understood the argument that shareholder value is exclusively determined by profit. As I see it, the stock market consists of various firms saying "buy our stock, and we will try to achieve X with your investment", where X might be maximum ROI, but I don't understand why it has to be. If I want to found a company whi…

The complicated part is owners who try for higher ROI buy shares away from holders with lower expectations. This is a challenge for capitalism as it encourages Tragedy of the Commons.

Re: Tim Cook Rejects Politics of the NCPPR

#82

Post by smsm42 » Sat, Mar 01, 2014, 1:06 PM UTC

rjknight wrote: post #48

I understand and agree with the idea that companies should maximise shareholder value, but I've never understood the argument that shareholder value is exclusively determined by profit. As I see it, the stock market consists of various firms saying "buy our stock, and we will try to achieve X with your investment", where X might be maximum ROI, but I don't understand why it has to be. If I want to found a company whi…

If Tim Cook would actually say "yes, our green energy project has costed us N dollars so far, and it is a good thing because that's what we do and because government actually pays us back M dollars of it with that sweet taxpayer money" - that would be free market. Well, except for the taxpayer money part, but that's hardly Tim Cook's fault. Instead, no actual information was given, and people asking wrong questions were told to shut up or get out of the investment. I'm not an Apple shareholder (except as part of broad index funds) and probably never will be, but if I were, I'd like my executive to be more open and ready to answer hard questions than that. Of course, the swooning of people who had their cause supported would probably bring Cook much more in feel-good PR than actual transparency would bring him. So, the irony is he's probably doing what's good for the ROI, but not in the way his fanboys may think or like.

Re: Tim Cook Rejects Politics of the NCPPR

#83

Post by smsm42 » Sat, Mar 01, 2014, 1:11 PM UTC

peterkelly wrote: post #51

mikestew wrote: post #8

" said that there are many things Apple does because they are right and just, and that a return on investment (ROI) was not the primary consideration on such issues" The next time someone trots out the tired old "companies are legally obligated to maximize profits/shareholder value" to explain away crappy corporate behavior, I'm linking to this. And kudos to Cook for telling NCPPR to take a figurative hike.

Apple's sustainability efforts (and other things like support for blind users) can be seen as being in the interest of profits. The NCPPR's view that Apple should do the minimum necessary to meet government environmental rules in order to maximise profits is short-sighted. A lot of people care about environmental issues - as well as things like labour concerns with the factories in China. By doing the right thing and…

If only Tim Cook said that instead of saying "I don't consider the bloody ROI, and if you don't like that, divest". There's a legit approach of going short term, and it may be wrong, and if it is wrong, it can be explained why it is wrong - just as you did. Or it can be shouted down - because how dare those neanderthals ask us questions? I'd rather like to live in a climate where questions get answered, not shouted down.

Re: Tim Cook Rejects Politics of the NCPPR

#84

Post by smsm42 » Sat, Mar 01, 2014, 1:17 PM UTC

cpncrunch wrote: post #25

fdschoeneman wrote: post #13

Earlier quoted context omitted.

Like I said, forget their opinions, but also forget their motivations. What is wrong with the request?

There is nothing wrong with the request. However it was soundly rejected by the shareholders (only 2.95%). That's how corporate democracy works. The problem is that they kept pushing to get their way even after they had been voted down by the shareholders. The more I hear about Tim Cook, the more I admire him. That was a really great put-down he delivered. There comes a point where you can't reason any further with u…

The next thing to do after that is to go and publicly complain about how political discourse has devolved recently.

Re: Tim Cook Rejects Politics of the NCPPR

#85

Post by smsm42 » Sat, Mar 01, 2014, 1:18 PM UTC

dhoulb wrote: post #20

fdschoeneman wrote: post #13

Earlier quoted context omitted.

Like I said, forget their opinions, but also forget their motivations. What is wrong with the request?

Well, for Apple to collect that information would probably be significant work. What's the cost of swapping out bad metals in their batteries? Some of it is really hard to quantify. But, it wasn't a serious request for information. That's what was wrong with the request — it wasn't one. They were trolling. And you don't feed trolls.

Shouldn't they be doing that anyway? Like, shouldn't the company know how much policies cost it versus the alternatives? Or it's better not to know the costs if you're doing the right thing?

Re: Tim Cook Rejects Politics of the NCPPR

#86

Post by jvvlimme » Sat, Mar 01, 2014, 1:23 PM UTC

MWil wrote: post #79

jvvlimme wrote: post #75

Earlier quoted context omitted.

It's actually a myth that a company has to maximize shareholdervalue. There is no corporate law even remotely suggesting it and it is generally a horrible idea. http://www.washingtonpost.com/opinions/harold-meyerson-the-m...

I'm sorry but that article neglects any mention of court opinions (many of which I have read, as has any law student) which interpret the law and say otherwise.

Lynn Stout, a Cornell Corporate Law Professor, seems to disagree with you: http://www.amazon.com/Shareholder-Value-Myth-Shareholders-Co...

Re: Tim Cook Rejects Politics of the NCPPR

#87

Post by k-mcgrady » Sat, Mar 01, 2014, 1:32 PM UTC

aragot wrote: post #62

k-mcgrady wrote: post #58

Earlier quoted context omitted.

>> The next time someone trots out the tired old "companies are legally obligated to maximize profits/shareholder value" to explain away crappy corporate behavior, I'm linking to this. What he's doing IS MAXIMISING SHAREHOLDER VALUE! In the long term the sustainability projects will be important. Over 97% of shareholders rejected the proposal put forward so technically he was doing what the majority of the shareholde…

> IS MAXIMISING SHAREHOLDER VALUE Did the stock go up after the event? http://finance.yahoo.com/q/bc?s=AAPL&t=5d&l=on&z=l&q=l&c=

This took place at the annual general shareholders meeting - this was obviously not the only thing discussed. For all you know his remarks on this subject prevented a larger drop in price.

Re: Tim Cook Rejects Politics of the NCPPR

#88

Post by chalst » Sat, Mar 01, 2014, 1:35 PM UTC

jvvlimme wrote: post #75

chalst wrote: post #63

Earlier quoted context omitted.

The fiduciary duty of the directors of a company entails that they make no decisions that prejudice the general shareholders of a company. The classic case is making an issue of equity that benefits only a limited group who can buy it at the expense of diluting the value of the equity of other shareholders. The idea that (i) the entire value of a company is the NPV of future profits to the shareholders, and that (ii)…

It's actually a myth that a company has to maximize shareholdervalue. There is no corporate law even remotely suggesting it and it is generally a horrible idea. http://www.washingtonpost.com/opinions/harold-meyerson-the-m...

I think I said that, with the caveat that different jurisdictions have varying stipulations about what the fiduciary obligations of companies are, and there has been some legal controversy about the idea over the years. There has been, unfortunately, case law that takes the idea seriously [see esp. 1].

Today, I think, it is hard to find people who think it is good for companies to be obliged to maximise shareholder value. John Kay, a British economist, journalist and author of the excellent Kay Review [2], has written very well about the problems of expansive readings of fiduciary responsibility.

[1]: Katz v. Oak Indus., Inc., 508 A.2d 873, 879 (Del. Ch. 1986) judged “It is the obligation of directors to attempt, within the law, to maximize the long-run interests of the corporation’s stockholders." In Long v. Norwood Hills Corp., 380 S.W.2d 451 (Mo. Ct. App. 1964), the court observed: “Plaintiff cites many authorities [including Dodge] to show that the ultimate object of every ordinary trading corporation is the pecuniary gain of its stockholders and that it is for this purpose the capital has been advanced.” - via http://www.professorbainbridge.com/professorbainbridgecom/20...

[2]: https://www.gov.uk/government/consultations/the-kay-review-o...

Re: Tim Cook Rejects Politics of the NCPPR

#89

Post by SixSigma » Sat, Mar 01, 2014, 1:43 PM UTC

aragot wrote: post #62

k-mcgrady wrote: post #58

Earlier quoted context omitted.

>> The next time someone trots out the tired old "companies are legally obligated to maximize profits/shareholder value" to explain away crappy corporate behavior, I'm linking to this. What he's doing IS MAXIMISING SHAREHOLDER VALUE! In the long term the sustainability projects will be important. Over 97% of shareholders rejected the proposal put forward so technically he was doing what the majority of the shareholde…

> IS MAXIMISING SHAREHOLDER VALUE Did the stock go up after the event? http://finance.yahoo.com/q/bc?s=AAPL&t=5d&l=on&z=l&q=l&c=

For some people, value != price

Re: Tim Cook Rejects Politics of the NCPPR

#90

Post by keeshawn » Sat, Mar 01, 2014, 1:44 PM UTC

smsm42 wrote: post #82

rjknight wrote: post #48

I understand and agree with the idea that companies should maximise shareholder value, but I've never understood the argument that shareholder value is exclusively determined by profit. As I see it, the stock market consists of various firms saying "buy our stock, and we will try to achieve X with your investment", where X might be maximum ROI, but I don't understand why it has to be. If I want to found a company whi…

If Tim Cook would actually say "yes, our green energy project has costed us N dollars so far, and it is a good thing because that's what we do and because government actually pays us back M dollars of it with that sweet taxpayer money" - that would be free market. Well, except for the taxpayer money part, but that's hardly Tim Cook's fault. Instead, no actual information was given, and people asking wrong questions w…

These are climate change deniers... I don't think they are really interested in statements of fact.