Since execs have most of their compensation tied to performance, they want to maximize that as much as possible without sinking the company.
There's also cycles throughout year, so some profitable quarters are there to offset quarters with losses. Take the retail industry, for example. They make most of their money at the end of the year, so any profit should cover expenses for the first three quarters of their fiscal year.
So, when you say normal, you actually mean profitable.
I believe you misunderstood the OP. The OP is talking about increasing profit YoY.
If you have a company that makes a profit of $1 billion, and the next year they make another $1 billion in profit, they have not increased the amount of profit, and if they are publicly traded, the stock price will probably suffer, even though they made 1 billion freaking dollars! That is insane and it's not physically possible to continue growth forever.
As long as you can convince the investors that the current capital is better off redeployed, you don't have to. Case in point - AMZN for the first decade (or two).
They will lose to those that are profit focused as those companies will attract more investment and better quality employees. Not immediately, but they lose long term.
Same reason you can’t have a career without continuing to learn new stuff and upgrade credentials. Everyone else is doing it, so when it comes time to inevitably find a job again, it is easy to be behind.
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[ 3.2 ms ] story [ 61.3 ms ] threadSince execs have most of their compensation tied to performance, they want to maximize that as much as possible without sinking the company.
There's also cycles throughout year, so some profitable quarters are there to offset quarters with losses. Take the retail industry, for example. They make most of their money at the end of the year, so any profit should cover expenses for the first three quarters of their fiscal year.
So, when you say normal, you actually mean profitable.
If you have a company that makes a profit of $1 billion, and the next year they make another $1 billion in profit, they have not increased the amount of profit, and if they are publicly traded, the stock price will probably suffer, even though they made 1 billion freaking dollars! That is insane and it's not physically possible to continue growth forever.
Same reason you can’t have a career without continuing to learn new stuff and upgrade credentials. Everyone else is doing it, so when it comes time to inevitably find a job again, it is easy to be behind.