The High Flyers Podcast with Vidit Agarwal
00:25:55 · Alan Joyce
[00:25:55] S1: I'm not sure I do, because I think if you're always after approval, I think that gets you, and that maybe you're not then suited to do some jobs, because that means you never make a tough call. Because I think sometimes tough calls will automatically mean you don't get approval. All tough calls sometimes means that people feel there's a lot of negativity about that. But if you're doing it for the right intentions in mind, you have to be focused on it. And if you do everything for approval... You know, think one of the quotes that I've used at the time is the great Teddy Roosevelt quote. At the time of decision, the best thing you can do is the right thing. The next best thing you can do is the wrong thing. The worst thing you can do is nothing. If you're after approval all the time, I think what people get into is not doing anything, because they're worried about the mistake. And and you never have the successes if you're worried about the mistake. You never have the great successes and the great things that you think you'll achieve in your life if you're worried about that failure, because if you're always after approval, you'll never take the risk of the failure, and therefore you get into doing nothing. And I think that's the worst thing you can do in some jobs.
00:27:08 · Vidit Agarwal, Alan Joyce
[00:27:08] S0: That is so interesting. I feel I see that all the time with public company CEOs in particular, right? I've never been one, you've been one for many years and you know many years. I always joke they live in this state of paranoia all the time. This constant state of paranoia, Because they're like, what's the headline around the corner that's going to come and ruin my career? And I find that deeply fascinating. [00:27:32] S1: And I think the, Vidit, the other problem you have is that the life of a CEO was typically, I don't know if it's expanded, but when I was writing the book, looked her up, it was four to five years at the time of a publicly listed CEO. And then therefore, you know, there's not a lot of incentive to make the decisions that last a long time. And I say in the aviation industry, unfortunately, a lot of the decisions go generational. You know, the CEO before me decided to buy the a380s. The CEO before me took the first of the aircraft. I took 11 of the aircraft, and they were going to be... Now they're still operating for the current CEO, and they were wrong decision at the time. But you live with them. And that's the problem, that if you're there for for approval, you're there for four or five years, and you're not making the right calls that you believe are necessary, you'll make bad long term decisions for the company that everybody suffers with. And that's the structure of some of the public realistic companies we have. And unfortunately, I think that leads to bad outcomes. And we've seen a lot of bad outcomes.
00:27:32 · Alan Joyce, Vidit Agarwal
[00:27:32] S1: And I think the, Vidit, the other problem you have is that the life of a CEO was typically, I don't know if it's expanded, but when I was writing the book, looked her up, it was four to five years at the time of a publicly listed CEO. And then therefore, you know, there's not a lot of incentive to make the decisions that last a long time. And I say in the aviation industry, unfortunately, a lot of the decisions go generational. You know, the CEO before me decided to buy the a380s. The CEO before me took the first of the aircraft. I took 11 of the aircraft, and they were going to be... Now they're still operating for the current CEO, and they were wrong decision at the time. But you live with them. And that's the problem, that if you're there for for approval, you're there for four or five years, and you're not making the right calls that you believe are necessary, you'll make bad long term decisions for the company that everybody suffers with. And that's the structure of some of the public realistic companies we have. And unfortunately, I think that leads to bad outcomes. And we've seen a lot of bad outcomes. [00:28:43] S0: Back to the episode in a moment. I'm now joined by Ria again from Allens. You may remember hearing her before in this episode. Ria, you and I talked a bit about the capital gains landscape at the moment and some of the uncertainty that is playing in the ecosystem. People might be wondering how government responds to this. What is your read from that perspective?
00:28:43 · Vidit Agarwal, Rhea Nielsen
[00:28:43] S0: Back to the episode in a moment. I'm now joined by Ria again from Allens. You may remember hearing her before in this episode. Ria, you and I talked a bit about the capital gains landscape at the moment and some of the uncertainty that is playing in the ecosystem. People might be wondering how government responds to this. What is your read from that perspective? [00:29:06] S3: Thankfully, there is some good news there. So the government has thought about this and proposed a new innovative business CGT concession, which essentially preserves that CGT discount for qualifying equity holders in innovative startups. And that's the CGT discount that we have at the moment that we talked about earlier on the podcast. But the keyword there is qualifying. So there are actually quite a few conditions that need to be satisfied in order to access this concession, including pretty strict innovation criteria and generally also a three year holding period. So overall, the headline is pretty positive. We have the government listening to feedback and recognising that investment in startups is important. But the detail really will matter here because the concession is not law yet, and the eligibility rules are pretty strict and fairly targeted. So we really need to wait and see where the final legislation lands.
00:29:06 · Rhea Nielsen, Vidit Agarwal
[00:29:06] S3: Thankfully, there is some good news there. So the government has thought about this and proposed a new innovative business CGT concession, which essentially preserves that CGT discount for qualifying equity holders in innovative startups. And that's the CGT discount that we have at the moment that we talked about earlier on the podcast. But the keyword there is qualifying. So there are actually quite a few conditions that need to be satisfied in order to access this concession, including pretty strict innovation criteria and generally also a three year holding period. So overall, the headline is pretty positive. We have the government listening to feedback and recognising that investment in startups is important. But the detail really will matter here because the concession is not law yet, and the eligibility rules are pretty strict and fairly targeted. So we really need to wait and see where the final legislation lands. [00:29:58] S0: Interesting times. Thank you Ria and now back to the episode. How would you just quickly on this and then we'll come back to your life and career in a moment. How would you change that? Let's assume you were brought in as a consultant and 20 of the leading CEOs were in the room and the chairs of their board were in the room, how would you change that attitude?
00:29:58 · Vidit Agarwal, Alan Joyce
[00:29:58] S0: Interesting times. Thank you Ria and now back to the episode. How would you just quickly on this and then we'll come back to your life and career in a moment. How would you change that? Let's assume you were brought in as a consultant and 20 of the leading CEOs were in the room and the chairs of their board were in the room, how would you change that attitude? [00:30:24] S1: I think it's important for the boards and for the shareholders to make sure that they are picking and assessing the CEOs on what they believe is the right outcomes for the business. I think that's a dilemma in some cases because a lot of the shareholders are looking at the half year, full year results and are looking at in The US, it's every quarter. So I think there has to be more incentives for those shareholders to have a longer term view and to incentivize them around it. And that longer term view, I don't know if you change the REM structure, have the focus of the CEO and the REM to be structured on after they've left how the company is going. And what happens to the company well after they've left, given that that may be a way to actually improve on it. But I think in some cases, I think we were lucky. We had a chairman and a board that was very long term focused. We had shareholders that were long term focused. And if you have that and have those combinations, then I think it gives the CEO permission to go off and make those hard calls to have that long term focus.