> Epic is not doing this out of the goodness of their heart
Tim Sweeney founded Epic and wrote the Unreal engine himself. John Riccitiello’s whole career is in management. Even if they’re both entirely motivated by profit, they have different perspectives on how to get there.
Also, Unity is a public company, while Epic is private. Even though Tencent owns a considerable share of the company, Sweeney still holds over 50% ownership. That gives them very different incentives.
Sometimes we forget that executives are people too and they have their own personalities. Tim Cook famously[0] told climate change denialists in a shareholder meeting that “If you want me to do things only for ROI reasons, you should get out of this stock”. Sure enough, shareholders are also not solely motivated by profit, and voted with Cook on that occasion. It’s useful to remember that cynicism isn’t the same thing as realism.
If Tim Cook had calmly said what he did, I’d believe it was just toeing the party line. The fact that he actually got angry, though? He doesn’t strike me as the sort of person who’d fake that, I don’t think that’s the image he wants if nothing else.
He doesn't have to fake it. Dude probably believes that there's no connection between right to repair, unsustainable consumption, and planetary destruction. That might be worse than faking it.
iPhones have long support cycles. iOS 17 supports the iPhone XS/XR, which were released 5 years ago. So iPhone users don't have to replace their phone as much, reducing environmental impact. Plus with the recycling and other stuff used to make iPhones in the first place, their environmental impact is going to be lower than some other options on the market. Combine these two things together (longer device life, smaller impact for making a new device) and I can believe iPhones have the smallest CO2 footprint.
Phew, there I was thinking Apple do their best to make sure customers buy the new phone every year, but glad to hear it's not happening thanks to Apple.
I mean, Apple should just release a new model every five years and really get that footprint down...
Eh. Part of apples brand is “doing the right thing” and “being the good guy”. I would wager Apple’s brand would be hurt more by not being a green company. ROI is more complicated than simple fist level cost. Going green and doubling down on recycling has generated a much larger ROI than doing nothing.
Further more, Tim is bound by law to do what is best for the shareholders. Simply put, if Tim favored environmental concerns over profit he would be removed.
"Best interests" is deliberately vague. Is it in their "best interests" that you fire the CEO and call the cops because he raped an intern? Or maybe that you agree to accelerate his $40M "bonus" if he agrees to resign without saying why? Or maybe it's in their "best interests" that you pay PIs to develop evidence that the intern has a drug habit and "leak" this "shocking revelation" to the media if they go public?
You can argue almost anything meets this criterion, in some egregious scenarios a court won't buy it, but they will give you enormous leeway.
People write this sentence seeming to imply it means "CEOs and management have a responsibility to be as ruthless and sociopathic as possible to deliver the highest returns, and any consideration of the people or communities they trample beyond legal requirements is itself borderline illegal."
There is a lot - A LOT - of room for ambiguity and debate on the specifics of shareholder value and "best interests." The "legal constraints to act in the best interest" is not some set of corporate rules and KPIs codified into our legal code write large. It's not about maximizing a specific KPI over a fixed timeframe.
Not to mention Sweeney is the majority shareholder in Epic's case.
It’s a private company… to whatever theoretical extent he’s beholden to the majority of the shareholders with potential board of directors and shareholder meeting shenanigans … that majority of shareholders is himself… and I’m pretty sure he’s ok with his own decisions…
"Further more, Tim is bound by law to do what is best for the shareholders."
This stupid meme needs to die already. There is no such obligation, he only has a fiduciary duty to not trash the company and spend the earnings on cocaine. "companies are legally forced to maximise profit" has never been true and this piece of misinformation has been going around for ages now.
And, insofar as such an obligation to “maximise shareholder value” might exist, that obligation doesn’t necessarily translate into “maximise profit”.
The shareholders of a theatre company might care more about breaking even while getting an interesting assortment of plays produced with a great cast than they do about making a bunch of money out of the venture, so an executive who makes a bunch of money by running productions of uninspired cash grab shows won’t actually be maximising value. Likewise, I’m sure that Rob McElhenney and Ryan Reynolds care more about Wrexham AFC’s managers getting good athletic results than they do about making a bunch of money.
>And, insofar as such an obligation to “maximise shareholder value” might exist, that obligation doesn’t necessarily translate into “maximise profit”.
And even where it does translate into "maximise profit" because it's what shareholders of a particular company may want, there is no timeframe for it, and there is no way to tell whether any particular decision by the CEO runs contrary to the goal of eventually maximising profits.
Companies can spend all their revenues plus a constant stream of new capital on growing market share or revenue, on charitable activities or the happiness of employees, on huge research and development projects or on restructuring after restructuring and still credibly claim that all of it is ultimately meant to maximise profits.
The point where CEOs and CFOs have to be careful is when the company faces solvency issues. That's where legal limits of freewheeling decision making kick in, because it's where it's no longer about shareholders but about creditors.
There's still argument about this. The oft mentioned Dodge v. Ford Motor Company 1919 covers much the argument for and against. But it's clearly not straightforward.
My (IANAL) reading of it is that maximising shareholder value is probably the law, but it's practically unenforcible. Being practically unenforcible doesn't stop CEOs and boards from using it as a guiding principle.
Dodge v. Ford Motor Company was a Michigan State decision, so even if one thinks it means maximizing shareholder value is the law (it really didn't say that, broadly), it only applies in Michigan.
> "companies are legally forced to maximise profit" has never been true
It's more like too hard to be proven in any way. Unless you live in an simulator it's really hard to say which set of decisions is better than another. People often say it is obvious or in hindsight but fact is there are no such hard proofs.
Even then, if the shareholders approve of trashing the company with ice cream parties (had to get rid of the illegality of cocaine for this point) there's nothing inherently wrong or illegal with that.
As long as the executives are behaving generally how the shareholders want, it's not a problem.
Cook isn't bound by that true enough, because he remains the majority stakeholder, but that is increasingly not the case as it becomes more and more regular that companies bring in new CEOs from entirely different companies if not entirely different industries, who do not own that much stake. In those cases, the board and shareholders can and do exert a lot of influence, up to and including firing them if they do not do their jobs correctly, which to shareholders is invariably some form of "make line go up."
And that's just civil influence, there are legal mechanisms indeed in place if a CEO "trashes a company" and what that means is different depending on the company.
Tim Sweeney founded Epic and wrote the Unreal engine himself. John Riccitiello’s whole career is in management. Even if they’re both entirely motivated by profit, they have different perspectives on how to get there.
Also, Unity is a public company, while Epic is private. Even though Tencent owns a considerable share of the company, Sweeney still holds over 50% ownership. That gives them very different incentives.
Sometimes we forget that executives are people too and they have their own personalities. Tim Cook famously[0] told climate change denialists in a shareholder meeting that “If you want me to do things only for ROI reasons, you should get out of this stock”. Sure enough, shareholders are also not solely motivated by profit, and voted with Cook on that occasion. It’s useful to remember that cynicism isn’t the same thing as realism.
0. https://www.theguardian.com/environment/2014/mar/03/tim-cook...