You will recall that we have been blogging a lot lately about the Business Roundtable statement on corporate purpose. You will also recall that I have argued that the statement is mostly about woke washing rather than a serious commitment to stakeholder capitalism:
To date, the evidence is most BRT members remain committed to shareholder value maximization, despite their recent rhetoric to the contrary. This should not be surprising. The incentive structure faced by directors and managers still skews in favor of shareholders.
Why then did the BRT shift position? ... First, the members may be engaged in puffery intended to attract certain stakeholders for the long-term benefit of the shareholders. Specifically, they may be looking to lower the company’s cost of labor by responding to perceived shifts in labor, lower the cost of capital by attracting certain investors, and increase sales by responding to perceived shifts in consumer market sentiment. They may also be trying to fend off regulation by progressive politicians.
Apropos of which, the WSJ reported today that:
A day after Salesforce.comInc. CRM -1.89% posted record quarterly sales, the business-software company notified its 54,000-person workforce that 1,000 would lose their jobs later this year.
I don't think even Scrooge would have told his employees that in a few months down the road 2% of them would be fired, leaving them to twist slowly in the wind for months while worrying whether they'll be among those who get fired.
What makes all of this especially pertinent is that Saleforce CEO Marc Benioff is one of the leading social justice warrior CEOs, constantly bragging about what a great human being he is.
As John Stoll opined in yesterday's WSJ:
Shareholders, the Business Roundtable pledged, would be just one of the stakeholder groups that a company would be judged on pleasing. Despite the trying times, boosters say that the ballyhooed effort is flourishing.
In a televised interview this week, Salesforce. CRM -1.89% com Inc. Chief Executive Marc Benioff called the company’s strong earnings “a victory for stakeholder capitalism.” A signatory to the pledge, Mr. Benioff said, ”We did a great job for our shareholders this quarter, but we also did a great job for our stakeholders.” ...
... how does the billionaire founder justify this claim when shortly after that interview Salesforce notified staff of plans for around 1,000 layoffs? This despite Mr. Benioff’s no-layoff pledge in March on Twitter and the challenge to other CEOs to follow his lead. (Hint: the pledge was for 90 days.)
Told you so.
