this post was submitted on 18 Jun 2023
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When we think CEO we need to think “shareholders.” Including potential shareholders as in Reddit’s case. I think sometimes we are so focused on our feelings about a “big boss” that we forget the CEO is merely an avatar for the investor point of view in a business. They answer to the board of directors who represent or are even made up of shareholders, and they are usually paid in such a way to motivate shareholder benefits, like with stock instead of a high salary.
And when we think “shareholders” we need to think “loan money.” That’s how you get to be a shareholder. You plunk down some cash to float the business.
Therefore, to really be CEO-proof, an entity needs to be fiscally independent and never need an advance of cash to keep going. It must be entirely bootstrapped, paid-as-you-go, with no one standing to gain a whole bunch or lose a whole bunch by its failure or sale. That’s kind of a lot of needles to thread when you’re building something big. It can be done but we have to know what game we’re actually playing and not get distracted by “fuck The Man” sentiments. This is about cash.
Literally this… what is happening in Reddit is the CEO attending the needs of the shareholder via the board… companies aren't the "sisters of charity". They are where they are for profit and at the very least they need to have a cash flow that allow them to pay employees and bills. There are some B Corps out there, but most of the companies are there to make the big buck. In the case of Reddit we users are just a product that they try to keep to make the company profitable selling ads or whatever. If you want a Reddit-kind-of platform user-centric we need to pay for it and become the customers instead the product.
But isn't reddit still a private company? They don't have shareholders in that case right? They WANT shareholders which is why they're pulling this b.s to appear profitable when they go public. I think this is just plain old greed.
Private companies can have shareholders too, it's just that the shares can't be sold on a public stock exchange. Reddit has a board and private shareholders, I think Conde Nast (or it's parent company) is one, and so is Tencent.
It's understandable for reddit to need money to continue functioning. That's never been the argument. The problem is how unreasonable the pricing is and how unwaverable they are about it.
undefined> They are where they are for profit
Initially corporations were supposed to put the public good above profits. Now they have a legal obligation to put the interest of their shareholders above all else (usually interpreted as profits above all else). It was an unfortunate shift.
To be fair, CEOs are often compensated largely through stock and are therefore incentivized to boost that stock price, at least until they have the opportunity to sell (or use as collateral on a loan with an inflated valuation, I'm not super familiar with the financial trickery played at that level).
I did say pretty much just that: