Its Not the CEO's Company
Too many CEO's of public companies in the 80's and 90's seemed to act like they owned the company. In particular, the CEO's of Tyco and Adelphia appeared to be more interested in lining their own pockets with shareholder financed perks than with managing the company. And, I highly recommend "Barbarians at the Gate" as not only a great story about the largest LBO of all time, but also as a narrative about CEO perks gone mad.
The fact is that public company CEO's are the hired help. Talented, well paid, but hired help none-the-less. Professor Bainbridge has a good post on the demise of the Imperial CEO.
In theory, a corporation is run by its board of directors, whose decision-making is guided by the principle of shareholder wealth maximization. In practice, however, all too often corporations are run by their top managers for the benefit of those managers. Times are changing, however. In particular, the cult of the imperial CEO that dominated the business world in the 1980s and, especially, the 1990s is dying a slow death.
I hope he is right - it is past time for do-nothing OK-everything boards to reassert their primacy and fiduciary responsibility.
