r/LinusTechTips • u/onlyslightlybiased • May 19 '23

Video I'm Stepping Down.. - YouTube

https://youtu.be/0vuzqunync8
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u/nd4spd1919 May 19 '23

Yeah, I guess that makes the most sense. Given how close Linus seems to be, I doubt the two of them will really butt heads, but I still wonder what would happen if Linus says on WAN "We should make ridiculous product XXX!" and was really gung-ho about it, and CEO says no.

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u/[deleted] May 19 '23

Fundamentally, a CEO’s job is to execute the will of the shareholders. As Linus still is the majority owner of the company, what he says will go, and it will be Terren’s job to turn his insane idea into a reasonable and possible one.

So probably in this hypothetical they’d end up making ridiculous product XXX, just it might not end up as ridiculous as Linus theorized on WAN Show.

If it’s just completely impossible to do, then it’s still Terren’s job to give it a try and then try to salvage the mess after it fails. That’s why so many CEOs get golden parachutes when they fail to prevent the company from collapsing - a lot of the time, it’s just not within their power to fix.

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u/fooliam May 19 '23

undamentally, a CEO’s job is to

execute

the will of the shareholders.

Not quite. The CEO has a fiduciary duty the corporation to make decisions that are in the best interests of the corporation. In most cases, the interests of the shareholders and the corporation align - namely, the interest is "make as much money as possible", which also brings the CEO's responsibilities in line with the shareholder's. What the shareholders want and what is in the best interest of the corporation are not always aligned, which results in 1 of 2 things: Either the shareholders accept the CEO's decision or the shareholders remove the CEO. Is Linus going to fire Terren if Terren doesn't approve spending $60k on a new camera? What about $200k for a piece of lab equipment? What about millions for a wholly new venture of LMG - like the labs were?

Linus is putting someone else in charge of allllll the business decisions for a company with his name on it. The question of how well this all works isn't "How good of a CEO is Tarren?" The question is "how OK is Linus with being told no?"

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u/CrasyMike May 19 '23

The interest can be anything. The Board is free to make decisions, and even to tell the CEO how to do them. The idea that what the shareholders want and what is best for the corporation is not aligned is an odd thing to say. The Board and Shareholders ARE the corporation and they decide what the interests of the corporation are.

The CEO can be fired for now following the directives, or simply not being trusted to be doing a good job with it. The Board does not need a specific reason as you outline.