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[WSJ] Elizabeth Warren: Companies Shouldn’t Be Accountable Only to Shareholders

Discussion in 'BBS Hangout: Debate & Discussion' started by Os Trigonum, Aug 16, 2018.

  1. mtbrays

    mtbrays Contributing Member
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    I mean, Chinese factory workers were being paid an average of $1.74 per hour in 2009 (I couldn't find any more recent data during my quick search). While "skill" may factor in somewhat, the economics of paying an American factory worker a living wage vs. a Chinese factory worker $1.74 per hour outweigh any skills-based argument (which is also insulting to American workers with skills who simply cannot find work. For all of my criticism of him and his supporters, this is a nerve that President Trump hit during the campaign. It's also one that Bernie Sanders touched on from the left). There are almost 1.4 billion people in China and not all of them are engineers.

    We've wanted it both ways for a long time in this country: cheap goods alongside decent wages. We either agree that paying our workers a living wage and providing ample opportunity to everyone is a worthy cause or we remain entranced by cheap goods and growing, highly-concentrated profits that are out of reach for the vast majority of our fellow citizens. The carrot at the end of the stick is rotten, but we're still reaching after it.
     
  2. pgabriel

    pgabriel Educated Negro

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    We had it the way we wanted but now Ford can just move the plant to Mexico or China
     
  3. adoo

    adoo Member

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    Jim Cramer has been a successful Wall Street professional---stockbroker, trader, fund manager, author and TV host---for over 30 years. This is
    his take on Senator Warren's proposed bill.

    Investors shouldn't be too quick to write off Senator Elizabeth Warren's ideas as bad for business.
    "Look for the companies that take care of their employees and you'll find some fabulous stocks," the "Mad Money" host said.
    While he doesn't believe that a federal corporate charter, as proposed by Warren, is the best way to achieve the goals of the her bill, the
    "Mad Money" host points out that "some of the best-run companies he follows have already taken a page from Senator Warren's playbook.

    Cramer cites Costco, Domino's and Salesforce.com as three companies that exemplify one of Senator Warren's core ideas that "doing well and doing good can go hand-in-hand."

    Cramer recalls when
    • former Costco CEO Jim Sinegal telling him that "one of the big differences between Costco and nearly every other retailer is that Costco gives its workers better pay and more benefits." Paying workers more leads to less employee turnover, which is a boon for companies because constantly training new employees can be costly and lead to a poor customer experience.
    • former Domino's CEO Patrick Doyle telling him that during his 8-year tenure, he was most proud that 90 percent of franchise owners used to be hourly workers. Having franchise owners who are intimately familiar with the business is one of the reasons why Domino's "consistently beats the competition."
    • database / SW consulting firm, Salesforce, CEO Marc Benioff telling him "the need to reward stakeholders, not just shareholders" more than any other CEO in the country.

    While these three companies have policies that would be "music to Senator Warren's ears," their bottom lines haven't suffered as a result. On the contrary, Costco shares are up 20 percent this year, while Salesforce and Dominos posted even bigger gains – 42 and 52 percent, respectively.

    In Cramer's view, Senator Warren might have a winning formula for choosing high-performing stocks. "Look for the companies that take care of their employees and you'll find some fabulous stocks," he concludes.


    https://www.cnbc.com/2018/08/16/cramer-dont-dismiss-sen-warrens-ideas-as-bad-for-companies.html
     
    #83 adoo, Aug 17, 2018
    Last edited: Aug 17, 2018
    FranchiseBlade and Amiga like this.
  4. dmoneybangbang

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    We had it the way we wanted because the US was the only manufacture after WW2, look what happened when countries built themselves up afterwards.

    Take a look at how well socialism does in America. Look at how well changing corporate governance has gone in this thread.
     
  5. pgabriel

    pgabriel Educated Negro

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    I know we head a 30 year jump start on everyone after wwii because europe and japan had to rebuild.

    However we also led in education. This isn't about socialism its about the quality of American workers
     
  6. Amiga

    Amiga I get vaunted sacred revelations from social media
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    Domino has been doing something right. Their stock price grew faster than Facebook, Apple, Google and Amazon since Doyle became CEO (2010). You can have the cake and eat it too. It's a win win.

    [​IMG]
     
    FranchiseBlade likes this.
  7. dmoneybangbang

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    Of course it’s about socialism. We still lead in education overall, our public schools and higher education isn’t private only. Why do you think Germany’s workers are better trained?

    You don’t view our education system as socialist?
     
  8. pgabriel

    pgabriel Educated Negro

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    I dont care what it is. It benefits everyone to have an educated populace.

    Why are you thinking im arguing about socialism. Dont make assumptions. Im just talking about skill levels.

    Yes i think Germans are more educated. On the socialism note, economically socialism works in Europe because they dont have the ethnic divisions in countries like Germany
     
  9. Rocketman1981

    Rocketman1981 Member

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    Elizabeth Warren doesn't believe this garbage. Its a campaign call.

    Yes! Let's let government dictate more how businesses are run and then McDonalds will run like the DPS!

    Governments will never be efficient because they're all unionized workers that essentially can't be fired.
    They make silly promises they can't afford to keep and if our economy didn't keep growing due to entrepreneurs
    and businessmen than they'd run out of money to pay those promises ala Argentina!
     
  10. TheresTheDagger

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    I didn't realize Paypal started as a $100 Billion company.

    I imagine when the company was starting out and a risky investment, they could have bought in for a much lower price and been multi millionaires today. That's the thing owners invest their own money at the risk of losing it all. Employees don't, and yet feel that simply working for a company entitles them to windfalls. It doesn't. If they want access to the windfalls, risk your money by investing. The greater the risk, the greater the potential reward. Simple concept really.
     
  11. robbie380

    robbie380 ლ(▀̿Ĺ̯▀̿ ̿ლ)
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    He also got paid a shitload more than the workers at the average Domino's franchise. Should we demonize or celebrate that? Also, I don't know what the average franchisee makes for Domino's Pizza but that would be a better way of judging things rather than the stock price. Are they saturating areas in order to increase sales and royalties to Domino's Pizza Corporate but hurting/limiting owners? I have absolutely no clue, but I'd be curious to hear from a franchise owner and what their opinion of the franchise is. Clearly, they have done a lot of things right since the company sucked before Doyle.
     
  12. dmoneybangbang

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    How about you actually read what is being proposed sport?
     
  13. Amiga

    Amiga I get vaunted sacred revelations from social media
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    Point is great benefits to employee yield great stock price for investors. It’s not a foreign concept that having ownership, having a voice, being valued lead to great performance.

    Ceo paid is a different topic. My general take is I have no issue with how much they make. The issue is at the other end.
     
  14. dmoneybangbang

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    Why do you assume it’s the owners who invest their own money? PayPal certainly needed private equitiy markets to grow as well.
     
  15. dmoneybangbang

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    This is about the bigger picture of corporate governance.
     
  16. JuanValdez

    JuanValdez Contributing Member

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    I agree with that. But, again I think you are conflating profits with control. Warren is talking about sharing control, not sharing profits. I agree profits should go to equity holders.
     
  17. robbie380

    robbie380 ლ(▀̿Ĺ̯▀̿ ̿ლ)
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    There are multiple topics being discussed in this thread. Those posts by txtony and adoo weren't about corporate governance. Employee pay isn't corporate governance. It's a cost/benefit business decision. Anyhow, we are getting into minutiae here.
     
  18. robbie380

    robbie380 ლ(▀̿Ĺ̯▀̿ ̿ლ)
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    I agree with you that competitive pay and perks are good (IMO a necessity in this labor market) and can produce a lot of benefits for all parties. I mentioned that in my post earlier in the thread. I'm a part owner in some UPS Stores. The thing I'm pointing out is that Domino's is a franchise, like the UPS Stores I own. The owners of the franchises decide what they will pay their employees not Domino's corporate, the franchisor. When Doyle took over his main focus was the quality of the Domino's product that was being sold by the franchisees among other things. The franchisee's that own the retail locations are effectively the customer, not the employee, of Domino's the franchisor. Franchisees often do have strong voices with their respective franchisors. In the case of the UPS Stores we have a couple of franchisee elected councils that meet with the higher ups that run the UPS Store corporate side to discuss issues that the franchisees have or issues with corporate policies (UPS policies which is another completely different entity from us).

    What I was trying to point out is that the stock chart of Domino's corporate, the franchisor, might not necessarily match the success of the franchisees. They are different entities. I understand that many former employees have become franchisees and that helps them to run their business effectively. My partner was similar in his experience with being an employee at a Mailboxes Etc/UPS Store prior to becoming an owner.

    Just pointing it out since it is a little nuance to consider.
     
  19. Rocket River

    Rocket River Member

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    So . . . Should they not have some level of accountability to the American People?

    Rocket River
     
  20. pgabriel

    pgabriel Educated Negro

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    In terms of goods and services, companies do have safety standards for instance.

    Wages are dictated by market, they aren't unique to individual companies. Wages are an expense that has some wiggle room but really wages are dictated by market.

    I work general labor jobs currently and there actually was an increase in wages on the lower end of jobs because so many people were needed in clean up after Harvey in the Houston area
     

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