Comment by da_chicken
6 days ago
> Additionally, managers may prefer mergers because empirical evidence suggests that the size of a company and the compensation of managers are correlated.
Yeah, that's where my mind went. Executive and upper management salaries seem to be a function of revenue, not profit.
A lot of compensation works that way, to be honest. First order is that you get a percentage of whatever river of money you sit close to, regardless of effort or skill.
Esp when you are talking about software. Revenue means you have a customer that is locked up. Once you are ready to get profit, reduce costs/jack up prices and profit comes rolling in.