Agency Problem and Vanity Projects

Your CEO is likely prioritizing their ego over your bank account. In corporate finance,

this is called the Agency Problem. While the official goal of a corporation is to maximize shareholder

wealth, managers are human. They want job security, private jets, and to build massive

business empires just to feel powerful. This is why we use ruthless math like Net Present Value.

If a project doesn't generate real cash flow that beats the cost of capital, it is just a vanity

project. Always check if management is making money for you, or just building

a monument for themselves.