I was just watching CNBC and a protracted discussion about
whether Facebook should look to replace Mark Zuckerberg as CEO. Sometimes it is amazing to me how much
the stock market talking heads think they know about business…and how little
they actually know.
The entire conversation about Mr. Zuckerberg’s tenure
focused on the fact that the stock has dropped by about 50% since the IPO. No discussion was made about the fact
that the company has almost a billion users; that the employees love the place
with a fanaticism that borders on irrational. All of the criticism of Mr.
Zuckerberg’s leadership centered around a temporary loss of un-realized gains
for shareholders. Of course this
can only be the prime metric for CEO performance if you believe that
shareholders are the primary stakeholders for his company. Which, of course,
any businessperson worth their salt will tell you is not the case. I’ve been railing at this ridiculous
short-term mindset that is fostered on Wall Street for the last 6 years. Noting how on so many occasions,
including the one that resulted in our recent financial crisis, this short-term
mentality can lead to executives making decisions that destroy long-term value.
These yahoos on Wall Street have concluded from a single quarter of stock
performance that this guy isn’t up to the challenge.
I don’t know if he is or not, but I do know that Wall Street
continues to look at all the wrong metrics.
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