Is PROFIT the best way to measure a CEO's performance?

[MadRat]

Is PROFIT the best way to measure a CEO's performance?

 

[AndyHui]

No, but it would be difficult to argue that most average shareholders are concerned with anything else other than their dividend or share price.

 

[gotsmack]

There are other things too, like market share and long term strategy

 

[iamwiz82]

Leadership ability is the best way to measure a CEO. Profit is a way of judging productivity of employees.

 

[glen]

Yes.
Money is everything to businesses.
If money is not everything to a business, then it is not a business but a charity, church, social organization, non-profit or some other such thing.
The true goal is long-term profitability, which is sometimes wrongly bartered for short-term gains. This will ultimately cause the business to fail, like some have recently in this country. Those, which concentrated on long-term profits, are still in business.

 

[Vadatajs]

no

profit has much more to do with the amount of money coming in than the ceo. If you have the best ceo in the world, there would be no profit if nobody bought the product/service.

Also high profit might be an indication of massive cost cutting where payroll, benefits and the like are concerned. A CEO that doesn't respect his employees, is never a good ceo.

 

[Vadatajs]

Originally posted by: glen
Yes.
Money is everything to businesses.
If money is not everything to a business, then it is not a business but a charity, church, social organization, non-profit or some other such thing.
The true goal is long-term profitability, which is sometimes wrongly bartered for short-term gains. This will ultimately cause the business to fail, like some have recently in this country. Those, which concentrated on long-term profits, are still in business.

That sort of mentality is why we have a DMCA, RIAA, MPAA and why any form of art/culture in our country has become nothing more than a commodity. It is why many corporations have outsourced labor to other countries (which is NOT good for the economy).

 

[Siddhartha]

Originally posted by: MadRat
Is PROFIT the best way to measure a CEO's performance?

It is the easiest way to gauge performance.

 

[jjones]

Originally posted by: Dr Smooth

Originally posted by: MadRat
Is PROFIT the best way to measure a CEO's performance?

It is the easiest way to gauge performance.

True. A CEO's performance should always be measured by the company's profitability. There are usually other circumstances to consider along with this, but the bottom line of a CEO's performance is the bottom line.

 

[Doggiedog]

What do you mean profit? There are so many different kinds of profit, net, gross, pro-forma, etc. Just looking at profit is not a good way of judging how well a company is doing. For example, you could have a company churning out a consistent profit vs a competitor but if a competitor has a better long term business model the company could be left in the dust after several years because they didn't reinvest their profits or invest in SGA and RD. If you are a greedy CEO knowing full well things may be going bad, you can sacrifice future quarters of performance by stuffing or front loading current quarters and lie and tell everyone everything is going great. Shareholders will then reward you by saying you are a genius not knowing a couple quarters down the road you won't have any revenues. I've seen that happen too many times to count.

 

[glen]

Originally posted by: Vadatajs

Originally posted by: glen
Yes.
Money is everything to businesses.
If money is not everything to a business, then it is not a business but a charity, church, social organization, non-profit or some other such thing.
The true goal is long-term profitability, which is sometimes wrongly bartered for short-term gains. This will ultimately cause the business to fail, like some have recently in this country. Those, which concentrated on long-term profits, are still in business.

That sort of mentality is why we have a DMCA, RIAA, MPAA and why any form of art/culture in our country has become nothing more than a commodity. It is why many corporations have outsourced labor to other countries (which is NOT good for the economy).

The purpose of a business is to make money.
If making art or culture is their main priority, they are not a business.
There is nothing wrong with not being a business.
The local symphony produced a lot of culture, but they are certainly not a buisness.
Business will improve an economy, just because they do not improve the US economy does not make them "BAD." -especially if you believe all humans, no matter where they are from, are equal.

 

[BoberFett]

Yes the purpose of a business is to make money, but there are different kinds of money to be made.

You can build a business to great heights, and then fire everybody, don't deliver to customers, flee to a foreign country etc. and you can make a fortune that way. It only works once though.

Or you can slowly build a business with a good reputation, treat your employees well, start slowly but work long and hard to earn the trust of customers, and have a long term business that over it's life can make immense amounts of money.

The former is more popular these days.

 

[MadRat]

OT: If there mission statement talks about 'customer satisfaction is our top goal' I wonder if I can sue my telco for their rotten customer support.

 

[ReiAyanami]

apparently the CEOs of enron and worldcom though stock price was a measure of their performance and they forgot entirely about the profit part, until it was too late.....

 

[Doggiedog]

Originally posted by: ReiAyanami
apparently the CEOs of enron and worldcom though stock price was a measure of their performance and they forgot entirely about the profit part, until it was too late.....

You are backwards. The stock price came as a result of phantom profits the CEOs created.