I want to invest in a public company and I want to know:
- Exactly how much power does the CEO has over what the public company does?
- Can a CEO control a public company even though he doesn't own a large proportion of shares?
For example, Steve Jobs has only 5.5 million shares of the 914 million shares outstanding (not even 1 percent). If Steve Jobs were to decide to try to kill Apple, does he have the power to do so?
The shareholders elect the board of directors who in turn appoint a CEO. The CEO is responsible for the overall running of the company.
To answer your specific questions:
- The CEO (typically) has the power to make all decisions for the company. It's customary for very large decisions to first seek the approval of the board, but that differs between companies and the type of decisions.
- Yes, a CEO can "control" a public company. That's exactly the point of having a CEO.
Yes, Steve Jobs could make decisions that are harmful to the well-being of the company. However, it's the responsibility of the board of directors to keep his decisions and behavior in check. They will remove him from his position if they feel he could be a danger to the company.Tweet