- Corporate America has a real problem with short-termism.
- JPMorgan CEO Jamie Dimon and Berkshire Hathaway CEO Warren Buffett's solution is to get rid of guidance, which would eliminate transparency and put companies at risk.
- Their solution also treats CEOs like a bunch of babies with no self control.
- Do better.
In a Wall Street Journal oped out Thursday, JPMorgan CEO Jamie Dimon and Berkshire Hathaway CEO Warren Buffett suggested earnings guidance should be eliminated. They reasoned the reports incentivize CEOs to think too short term in an effort to constantly beat Wall Street's expectations.
"I've been on 20 boards of publicly owned companies, not counting Berkshire's, and I have seen managements that I really think well of personally," Buffett told CNBC Thursday. "I'd be glad if they married my daughter or were named as executors of my will or moved in next door. But they get tempted by the predictions that have been made. Their ego gets involved. And when they find they can't make the numbers, sometimes they make up the numbers."
See the rest of the story at Business Insider
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from Business Insider https://ift.tt/2sQ4wWp
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