Welcome back to Stacking Equity, where we break down the major financial and tech news with more anticipation than an Alabama sorority house on rush week and less controversy than Southwest's new seating policy.

The Boardroom Mirage

The OpenAI saga this past year was the ultimate reminder that boards can be both powerful and dysfunctional. Depending on which leak you believed, the board ousted Sam Altman because of transparency issues, AI risk, or just plain politics, and then had to scramble when employees and investors revolted. In theory, boards are there to protect shareholders and provide oversight. In reality, too many feel like exclusive dinner clubs that occasionally remember they have responsibilities.

That gap between theory and practice is worth unpacking, because it doesn’t just affect OpenAI. It trickles down to every public company and, by extension, your portfolio.

The Theory: The Avengers of Corporate America

On paper, corporate boards are supposed to be a super squad. Different backgrounds with different superpowers, all assembled to fight for the greater good of shareholders.

• Diversity of backgrounds = diversity of thought and approaches
• Independence = accountability for management
• Fiduciary duty = shareholders always come first

When this system works, boards act as the ultimate check and balance, keeping management honest, ensuring long-term value creation, and protecting investors from short-sighted or self-serving moves.

That’s the theory. It’s also the story companies love to tell in their glossy annual reports and LinkedIn “culture” posts.

The Reality: More Rubber Stamps Than Checks and Balances

Instead of assembling Earth’s Mightiest Heroes, many boards look more like Jon Hamm’s Friends and Neighbors cast - an elite subset swapping power among themselves, more focused on preserving the club than serving the masses.

• Cozy club: Most board seats go to former CEOs, CFOs, or friends of management. It’s less about new perspectives, more about keeping it in the family.
• Overboarded members: Some directors sit on four, five, or even six boards at once. If your side hustle is ‘professional board member,’ how much real oversight are you giving
• The independence illusion: Many “independent” directors still have ties to the CEO - alumni networks, golf buddies, even family friends.

The result is groupthink and rubber stamps, not accountability.

And when things go south (see: Enron, Lehman, WeWork, or Meta shareholder flare-ups), it’s rarely because no one saw the problems. It’s because the people in the room didn’t want to rock the boat.

The Agency Problem: Management ≠ Shareholders

Economists call this the agency relationship: shareholders (principals) rely on management (agents) to run the company. The problem is, management’s incentives aren’t always aligned with yours. Without a strong board, here’s what happens:

• Empire building: CEOs push for bigger companies. Bigger means more power, more comp, and more job security - even if the growth doesn’t benefit shareholders.
• Excessive compensation: Higher salaries, cushy perks, and private jets may reward executives but add no value to shareholders.
• Over-risking: Management takes bold swings (think moonshot acquisitions) because they reap the upside, while shareholders eat the downside.
• Under-risking: On the flip side, when execs’ wealth is tied up in stock options, they sometimes avoid profitable risks to protect their own paper wealth.

Boards are supposed to step in here to protect shareholders from management’s misaligned incentives. When they don’t, shareholders pay the price.

What Good Governance Looks Like

Strong boards can mitigate agency problems, but they require more than window dressing:

• Independence: At least 75% of directors should be truly independent, with an independent chair (not the CEO).
• Board limits: Directors shouldn’t sit on more than 2–3 boards if they want to provide objective oversight.
• Elections: Annual, staggered elections keep accountability without destabilizing the company.
• Independent sessions: Boards should meet without management present (quarterly if possible) to avoid groupthink and let dissenting views surface.

It’s not glamorous, but this keeps companies aligned with shareholders and helps avoid “succession-style” meltdowns.

The Takeaway: Boards as Real Checks and Balances

At the end of the day, a well-structured board isn’t a footnote. It’s the operating system for governance. Done right, it supports better strategy, better oversight, and better long-term returns. Done poorly, it becomes an expensive social club that waves through bad decisions until it’s too late.

As investors, we don’t need to memorize every director’s résumé. But we should understand that governance is part of the investment risk and that strong boards aren’t just a nice-to-have. They’re a requirement for healthy corporate America.

Because if you can’t assemble a premier super-team, you’d better at least hope your board doesn’t look more like a meeting at the Stanwich Club in Greenwich, CT.

-1-

H1-B Visa Hike: Sticker Shock for Talent

The White House has proposed raising the cost of an H1-B visa application from about $1,000 to $100,000. That’s not a typo - it’s a 100x jump. The stated goal is to reduce reliance on foreign workers and open more opportunities for U.S.-born talent.

On the surface, that sounds good for “American jobs.” But the reality is that U.S. tech firms (from the Mag 7 down to mid-tier startups) depend on this program for highly skilled labor (i.e., engineers, developers, product managers, etc.). If the pipeline dries up, it won’t just be a headache for Google and Amazon. It could slow innovation across the sector and make it harder for smaller firms to compete.

The Importance: Yes, immigration policy has layers, but this change doesn’t suddenly mean more U.S. workers get hired. The talent pool is global, and pretending otherwise just creates shortages. Companies may pay more, pass costs to consumers, or move operations overseas. For investors, fewer skilled workers = slower growth and more wage pressure.

Basically, it’s like Apple’s new iPhone - it doesn’t really solve any new issues, it’s just another expense.

-2-

Return-to-Office: A Perk in Reverse

At the same time, a growing number of big companies are pushing return-to-office (RTO) mandates. Think three days a week minimum, or in some cases, full five-day schedules.

Management’s pitch? “Culture, collaboration, and productivity.”

Employees’ reality? Longer commutes, less flexibility, and weaker recruiting leverage.

Here’s the paradox: at the exact moment when firms are about to face a talent squeeze (thanks to H1-B limits), they’re doubling down on policies that make it harder to recruit and retain the people they do have.

The Importance: Flexibility is no longer just a perk. It’s table stakes for top tech talent. When boards and CEOs push RTO mandates while talent pipelines tighten, it raises questions about long-term competitiveness. For investors, that’s worth watching. Culture clashes don’t always show up in quarterly earnings, but they absolutely influence turnover, innovation, and retention.
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Add to this the demands (and fears) of AI innovation, and we’re seeing changes to comp structures and vesting schedules that will make job searches feel like a new frontier.

And let’s be honest — these mandates are about as well-received as Harris English making the Ryder Cup roster – we all know what his name in the envelope meant Keegan!

$55 Billion

For decades, going public was the dream - the IPO bell, new capital, a ticker symbol your mom could brag about.

Today, the calculus is flipped:

• Quarterly microscope: Public companies live and die by three-month earnings calls, which push boards and management to chase short-term wins instead of long-term strategy.
• Costly compliance: SEC filings, Sarbanes-Oxley audits, and disclosure rules aren’t just expensive; they’re distracting.
• Private capital abundance: With trillions of dollars chasing deals in private equity and venture funds, companies can scale without Wall Street.

In other words, there’s no real need to go public anymore.

EA’s move is a case study in a bigger trend: the shrinking public markets. Fewer companies are listed today than 20 years ago, and the fastest-growing firms often stay private far longer than they used to. That means the “market” represents a smaller and smaller slice of the economy that investors can access.

It also raises a policy question:

• Should we reduce regulation to make public markets less painful?
• Or should we increase oversight of private markets to ensure risk isn’t piling up in the shadows?

Takeaway: For investors, this is more than a gaming story - it’s about access. Public markets are supposed to be the great equalizer, letting everyone participate in corporate growth. However, if companies keep bailing to the private side, investors may be left holding a shrinking pie.

EA might be hitting reset on its shareholder base, but the real question is whether the system itself needs a full reboot like the Madden franchise.

-1- Year-End Tax Prep

Now’s the time to take a closer look at your tax picture while you still have a chance to adjust.

• Withholdings: Review your paycheck and equity compensation withholdings. RSUs and option exercises often don’t have enough tax withheld, which can lead to a big April surprise.
• Equity Compensation Gap: If you’ve sold shares this year, compare your actual withholding to your estimated tax liability. Too often, the gap is big enough to blow up cash flow if it isn’t planned for in advance.
• Expectations Matter: You can’t dodge taxes, but you can set expectations now so a surprise bill doesn’t derail your financial plan.

-2- Benefits Season = Review Time

If you’re checking boxes during open enrollment, pause and review carefully.

• HSA vs. FSA: HSAs are triple tax-advantaged and roll over year to year if you qualify. FSAs are use-it-or-lose-it.
• Insurance Coverage: Make sure your life and disability coverage reflect your current household (new kids, new mortgage, etc.).
• Dependent Care Accounts: Easy to overlook, but a powerful tax-saver if you’re paying for daycare, after-school programs, or summer camps.

-3- Quick Hits

• Roth Conversions: If your income is lower than usual this year, a partial conversion could make sense.
• Charitable Bunching: Grouping gifts can help maximize deductions if you’re above the standard deduction threshold.
• Year-End Deadlines: Contributions to 401(k)s, IRAs, and HSAs need to be in before Dec 31.

-4- Behavioral Reminder

Big year-end bonuses and stock vests are exciting, but don’t fall into the trap of treating them like “free money.” Taxes are still coming due. Don’t inflate your lifestyle before you know what’s truly yours to keep; otherwise, April has a way of humbling even the best-laid plans.

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Let’s call it for the month.

I’ll wrap it up faster than the Yankees’ October hopes (hopefully due to the Red Sox tonight).

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Until next time, keep stackin’.

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