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I strongly disagree with this on two points

1) one of the biggest moats for tech companies is talent, and it's necessary to have GOOD employees available to test new fields and grow quickly (when Android came along, Google suddenly needed a lot more engineers that it had available and saved the time/challenge/cost of hiring good quality engineers). Also the numbers you posted are overall employment numbers, not engineering ones (you need to have bigger HR, sales, support etc as you grow). I totally agree that there is a point of diminishing marginal return and they could be bloated, I just don't know what that is and I don't think you do either, so don't discount the number just because it's large.

2) Dividends are given if the company doesn't think that it can reinvest those in a more profitable way. Berkshire Hathaway notoriously doesn't give dividends - it doesn't mean Buffett & Munger are personally pocketing all the wealth. Also, dividend returns are taxed so that's why many times shareholders are okay with having the company reinvest it/bring it down as retained earnings because it's smarter that way.




With regard to dividends the tax situation is what is causing the bloated and shitty behavior in the first place.

In countries with Dividend Imputation (https://en.wikipedia.org/wiki/Dividend_imputation) such as the one I live in, companies actually distribute the money they earn.

In the USA, wasting money on bloat is effectively incentivised by the tax structure because you can spend money that is already inside the company with an effective discount vs distributing it so that it can be invested elsewhere.

Owners should be withdrawing the profits of their companies. The current situation leads to bloat and stagnation.


Never heard of dividend imputation - thanks for sharing!

Though I still don't agree with withdrawing profits - I think it's smart to reinvest profits into the business (just look at Amazon).




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