The entire board ex-Jack owns a little more than 1% of Twitter. It sure sounds like their interests are not well-aligned with those of the company owners.
They also draw huge salaries for what amounts to a nice part time job. Elon's response to that:
"Board salary will be $0 if my bid succeeds, so that’s ~$3M/year saved right there" https://twitter.com/elonmusk/status/1516056299376623626
What I am trying to understand is that – do the shareholders want these people to have cultural power?
And what are the chances that a large publicly held company has board members who own just that company's stock??
I don't understand what you mean. Who do you think the owners of Twitter are?
As far as I know, the vast, vast majority of shares are held by "institutions". The top ten funds owning shares in Twitter are index funds that mostly either buy the "total market" or the S&P 500.
If Twitter suddenly and completely vaporized tomorrow, these funds would have about a tenth of a percent headwind for that day. Nobody holding them for retirement would notice.
Really, I think it would make sense to say that the interests of the company owners are not aligned with Twitter.
Which is a good thing if you care about the rest of society and don't, for instance, want to contribute to the destruction of democracy to make a bit more profit.
Just because the interest of the company’s owners is small does not mean the interests aren’t aligned. In other words, magnitude != direction.
The board of Twitter has maximal power, but minimal interest. The owners of Twitter have minimal power and minimal interest too, relative to their other holdings, but maximal interest relative to the board.
The shareholders of Twitter generally have 99.9% of their assets in other companies.
Therefore their interest in profits doesn't necessarily translate to an interest in Twitter profits. Even with the most abstract theoretical profit-maximizer model, damaging 99.9% of your investments in favor of 0.1% is not how an entity would act.
This is generally a good thing, but it's also what people are complaining about with the board of directors.
If shareholders and directors are not diversified, then they can make a lot of money through destroying democracy, poisoning rivers, whatever, and then escape to New Zealand or somewhere. You know, "externalities". Monopoly-guy in a top hat.
But if they are diversified, then the profits are not worth it to them, because many of the externalities are now internalized.
Its shareholders, come on, that's an easy one :^)
Please, this is Companies 101.
Nobody has zero interest in society, unless they are a rogue AI that isn't programmed to believe in physical reality at all.
Also, nobody owns 51% of Twitter stock.
https://www.sec.gov/Archives/edgar/data/1418091/000114036122...
If Twitter goes down, you think someone is going to say "oh no, you shouldn't have bought all the stocks"?
Well, probably, because people will say anything.
Whether that’s good or bad is up for debate, but the Vangaurds of the world certainly have interests beyond buying and holding all the stocks.
I wish they did meaningfully push companies to implement profit incompatible policies-- then at least they'd be interesting to short.
It suggests some substantial motivation that I'm not sure ESG policies rise to the level of.
Individuals working for Vanguard have some motivation to talk about ESG and go through the motions.
But at the end of the day, if they buy all the stocks, and if their customers understand that they buy all the stocks, then how can ESG considerations make a meaningful difference in the overall job? It seems way too constrained.
Sometimes they pass questions on to the shareholders of the funds, which everyone ignores.
Which means that people like me, who vote every time, apparently are reasonably influential.
https://corporate.vanguard.com/content/corporatesite/us/en/c...
>We vote in accordance with these governance principles to represent the long-term interests of Vanguard fund investors.
would imply that they may vote in ways that forward these leftist initiatives. However, there is no evidence to show that their votes on boards have any agenda beyond profit-maximization.
[0]https://www.blackrock.com/corporate/about-us/diversity-equit...
https://www.sierraclub.org/press-releases/2020/01/blackrock-...
It’s not “left wing” but rather an effective co-opting of the left wing. It steers the conversation to being about the skin color of the board members and executives and away from the concentrated ownership of corporate shares.