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Old 09-17-2008, 10:53 AM   #52
Claeren
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Join Date: Jul 2003
Location: Section 218
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Numer 6 is the most important in my mind. (Breaking up super-sized companies)

The funny part is that breaking up really large companies is usually good for shareholders/owners too! Smaller and more focused companies grow faster and smarter and are more competitive. They generally are able to offer more value to customers and to work through crisis with more ease.

There only real value is to CEOs who look good (in the short term) assembling such behemoths because it looks like they are doing something to earn their bloated salaries and to hide the poor growth prospects inside the company due to lack of innovation.


Encana has gone this route, splitting themselves into two, and I commend them for it (as should their shareholders).


The sad part is that CEOs/companies that do go this route are then bought up by those over-sized monsters and all of the innovative talent is squeezed out....


I even have a way to do this! Apply a tax rate to companies based on size that cannot be written off/reduced. So (just an example) a $10B company pays 3%/yr, a $100B pays 6%/yr, a $500B+ pays 12%/yr. So they can pay the tax if they want but most likely they will come to a point where it offers much much higher value to split the company up.

You could also offer controls on who (by market size) can buy who (by market size), but I am not sure that would be even necessary?


Claeren.
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