Profit margins don't reflect how efficiently they manage costs. It could as easily be the case the PG&E mismanages resources and costs more to deliver the same power.
Even smaller order of magnitude than executive comp
>offsite team building exercises in Hawaii.
Source this actually happens to an extent that would materially affect the balance sheet?
Private plane: https://www.sfgate.com/business/article/executives-at-pg-e-h...
You hire your buddy’s company as a consultant or contractor, too. At a sweet rate.
It's a very problem to the healthcare market. Health insurance also has fixed profit, therefore there is a huge incentive to drive up costs. Better to make 15% on a $10,000 drug then 15% on a $10 one.
The power company wants to cut corners. The government wants to prevent that. So there is constant lawfare between governments and highly regulated companies, with neither really caring if it leaves the customer out of pocket (since regulators can blame the bills on the company).
The company outsmarts the regulators so the regulators carpet bomb them with so much regulation that they hope it will plug all the loopholes. The incentives between them are simply too far apart. And with inbuilt market failures (due to it being a monoppoly) you don't have effective market mechanisms that allow the government to just set basic safety standards and get out of the way.
It's closer to the USSR than social democracy. http://highered.blogspot.com/2009/01/well-intentioned-commis...
See also, healthcare.
The expectations, regulations, and imposed demands, are not 100% identical across all utilities. So any combination of factors could lead to higher prices.
I don’t have some special insider scoop to know whether the numbers listed in the statements are real or fake.
I was asking a general question of the motivation for large corporations to avoid having profits on paper. I asked the question rather than claiming it as a statement because I am less confident in the details and want to raise the issue without presuming that I know exactly what I'm talking about on the topic.
That is assuming you’ve taken the effort to read the filings.
If your lookkng for easy generalizations that applies to all public companies then no it doesn’t exist. You have to put in the effort to read each individual statement.
Its worth noting that reading financials still doesn't make me an expert in the area and I'd still be making a mistake to assume that means I understand well enough the games or motivations behind the numbers on a page.
It makes no sense to forego $0.80 in your pocket because you do not want the government to get $0.20.
I’m far from expert here, but is that too simplistic?
Where does perceived future value come into this? I’m thinking of companies like Amazon, which kept profit margins low while obviously having their shit together.
https://companiesmarketcap.com/
Amazon clearly has a mix of a high profit margin business (AWS and other services) with a low profit margin business (retail).
You will notice that most the top businesses are pretty much high profit margin tech and pharmaceutical businesses. Some oil and finance after that. And there are a few lower profit margin, but still large profit since the business is so large, but obviously, high profit margins and high profit is better than low profit margin and high profit.