Fact
Incentive-caused bias: share buybacks line the CEO's own jeans
Wilkinson explains incentive-caused bias using buybacks: CEOs paid in stock options benefit when share price rises, and buybacks shrink the share count to lift price — so a 'return capital to shareholders' move can really be self-enrichment.
“a lot of CEOs are compensated based on share price because they get stock options. So their stock options become more valuable when the share price goes up. And what makes the share price go up but share buybacks? So when you buy back shares, there's fewer shares and each individual share is worth more. So it's actually a way for the CEO to put money in his or her own jeans.”
Framework
No money, no plan, no technology — the 3 things that kill a company in excess
Alibaba's internal motto warned that an excess of money, plans, or technology will kill any company. Each becomes a crutch that erodes creativity, adaptability and customer focus.
“there are 3 things that will kill any company if in excess. So if you have an excess of any of these 3 things, it'll kill your company. Money, plans, and technology. That's not what I was expecting. So then he continued to explain that at Alibaba they had this internal motto. No money, no plan, no technology.”
Steal thisTreat abundant cash, rigid plans, and tech-for-tech's-sake as risks, not assets.
Framework
No money, no plan, no technology — the 3 things that kill a company in excess
Alibaba's internal motto warned that an excess of money, plans, or technology will kill any company. Each becomes a crutch that erodes creativity, adaptability and customer focus.
“there are 3 things that will kill any company if in excess. So if you have an excess of any of these 3 things, it'll kill your company. Money, plans, and technology. That's not what I was expecting. So then he continued to explain that at Alibaba they had this internal motto. No money, no plan, no technology.”
Steal thisTreat abundant cash, rigid plans, and tech-for-tech's-sake as risks, not assets.