FWIW I know the answer: management typically goes unchecked which is a huge problem. Managers vote themselves money and leave owners with the downside risk. Boards tend to be toothless rubber-stamps. Doesn't mean I have to like it (as an employee or a shareholder).
A common situation repeated over and over is that a manager has the opportunity to take huge risks for a big bonus, yet the worst that can happen is they lose their job.
Case in point, it took a small team at AIG only 6 weeks of selling a financial product to bankrupt the 90-year-old company and contribute to the 2008 crash, ultimately leading to a Fed bailout.
On the other hand, if the shareholders are mostly institutional funds, then fund managers generally aren't in the business of doing activist stuff for their many dozens of investments...
Disclaimer: Jassy is my skip*10 manager.
Do the math. Amazon also has at least two major verticals - retail and AWS. Within AWS, Amazon has multiple departments and markets.
Without giving too much away, let’s start with the obvious (and I’m just guessing, I am not looking at the internal tool to see the hierarchy right now)
CEO of Amazon -> CEO of AWS -> Manager of my specific department worldwide -> manager of specific geographies -> manager of specific verticals within that market -> my manager.
That’s 6. I’m sure I’m missing a few and I just completely made up that hierarchy. But it is a logical division.
A typical McDonalds worked in a corporate owned store could probably go up 6 levels
- worker
- shift lead
- store manager
- regional manager
- district manager
- two more levels
- CEO
He has 6 people between him and the CEO. Oddly close. Maybe Amazon isn’t bloated and is just unbelievably huge.
I’m in ProServe.
In this case, interest rates were lowered to basically zero and new money otherwise pushed into the economy, so the goal was more "growth" regardless of what independent analysis of the economy would say. This was the disconnect between Wall St and Main St widely that was recognized at the time. There was no way to know what the "new normal" would happen or what it would look like, so executives stayed with the pack.
And what really was the downside for hiring employees, even if they were just going to be let go later? Basically just the overhead of onboarding and getting them up to speed. And given that they were likely employed for a year or two, this wasn't even that wasteful.
Of course it sucks for the people whose lives are disrupted. But that's life in a paperclip maximizer driven by fickle centralized policy.
I would still consider it profitable compared to being a full time employee in Europe. Besides a higher rate, a contractor with his own company can benefit from all kinds of tax advantages a regular employee can't.
tbh I am not sure it is better money wise. for sure you get the freedom tho but also the stress of finding new customers
so actually for markets like software with plenty of jobs and employment the trial/notice period of 3 months are playing against the workers by creating a complex market that is not fluid at all. it however protects better workers that are in less fortunate industries which is good.
From what I hear some companies didn't go bananas, keeping hiring during the pandemic steady or in some cases below normal for the prior 5 years. I suppose that looks prescient in hindsight.
There are few things more damaging than over-hiring followed by layoffs. That usually means an end to the promotion/bonus/stock train having nothing to do with anyone's performance. What's morale like when that bomb drops?
Must be good to be in leadership... you get to fail, cause chaos to the business, scare away a lot of your top performers, and still collect millions. A good gig if you can get it.
Maybe some of these leaders "taking responsibility" will refuse their stock awards or return their bonuses?