Quote:
Originally Posted by aceventura3
The people making the decisions know they are accountable for today's results. They needed to continually show profitable growth quarter after quarter. Their salaries and bonuses were based on short-term results. The executive willing to sacrifice short-term results for long-term results is rare unless they are accountable to people with a lont-term view. The incentives of these organization's executives were not aligned with the long-term good of their shareholders, the public, or other constituents. When we look at problems in capitalist markets, this conflict is usually at the root of the problem.
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Ace, I think I understand the short term vs long term outlook and the lack of the "vision" thing. I still can't get my head around the fact that boards spend millions for executive searches and more millions in bonuses etc.. to get the best CEOs with the best political connections to guide these companies and it all boils down to short vs long term decisions. Heck, "Joe Sixpack" could have made the decision to take the fast easy money and not look past tomorrow.
I think there must be more to it. Perhaps they did not worry about the long term because they had connections and knew they would be bailed out anyway if things went wrong. Like you and others have pointed out, they are going to make the big bucks even if they fail.