I’ve long wondered about McKinsey’s business model—and how the consulting firm manages to stay in business. CEOs of S&P 500 companies last year received an average of $18.9 million in compensation—285 times the median pay of their workers. For that kind of money, one would think these executives possess intimidating brilliance and flawless instincts. The last thing they should need is a tutor to help them run their companies.
The proof, of course, is in the corporate pudding. And if the folks at Jell-O served the kind of toxic mush McKinsey has dished out over the years, they might be facing serious time in the slammer. Fortunately for McKinsey, it’s often their clients who end up in legal trouble for following the firm’s advice.
McKinsey once proudly touted its work with Enron, whose CEO, Jeffrey Skilling, became one of the firm’s youngest partners after graduating from Harvard Business School. Skilling was later convicted on multiple charges and served 12 years in prison.
Then there’s McKinsey’s deep and dirty involvement in America’s opioid crisis. The firm had its consulting tentacles in every stage of the pharmaceutical pipeline—from raw material procurement to aggressive marketing strategies that turned doctors into prescription machines. As the opioid epidemic worsened, McKinsey also advised U.S. regulators on how to respond—while still helping its pharma clients navigate those very agencies.
Given the lofty “values” U.S. corporations love to espouse—and their performative outrage when an employee so much as breathes out of compliance—you’d think only drug cartel bosses would want McKinsey’s services. Yet the firm remains highly profitable, and its global managing partner, Bob Sternfels, continues to show up on CNBC and conferences without shame.
This morning, however, I discovered what might be McKinsey’s most valuable product—and one the corporate press has never written about.
Anirban Kundu, a former McKinsey associate and now founder of investment firm Polymath Qapital in Bengaluru, India, spilled the beans on LinkedIn this past March. According to Kundu, McKinsey consultants don’t exist to optimize operations or drive innovation. Their real job? Making CEOs feel better about themselves—and, presumably, worthy of their obscene pay.
That insight may explain why McKinsey not only survives the rise of AI, but may actually thrive in it.
“People keep declaring that consulting is about to die or that AI will replace McKinsey,” Kundu wrote. “And there are 100+ startups already trying to do the same. But consulting, like cockroaches after an apocalypse, is unlikely to vanish—because at its core, it was never about data or decks.”
Kundu said people often miss what consulting really is: being the TAG team for a CEO—Therapist, Ally, Guide. He noted that the CEO’s journey is “deeply lonely,” an ailment GM CEO Mary Barra has publicly admitted to suffering.
“I remember a Senior Partner who regularly flew across the country to simply sit with a CEO during monthly spiritual pooja at his home,” Kundu shared. “Or another Partner who became a relationship advisor to a CEO going through a divorce. Or a partner who mentored and cheerleaded a CEO’s kid. Trust wasn’t built through slides or recommendations, but through the strength of companionship. No code can code this.”
While many CEOs are foaming at the mouth about AI’s promise to fire half the workforce, Kundu argued they’d never part with their TAG partner.
“Therapists, allies, and guides—these roles, deeply human, ensure consulting won’t be replaced by algorithms anytime soon. As long as CEOs remain human, they’ll still seek someone who understands not just their data, but their doubts, dreams, and decisions.”
“Unicorns come and go, but cockroaches are here to stay. In the world of AI, being human isn’t the bug—it’s the ultimate feature.”
Rest assured: the next time a cockroach scurries across my path, I won’t scream. I’ll nod in quiet recognition and think, “Ah, a McKinsey consultant.”
If a book is ever written on the rise and fall of America, it will undoubtedly include some lengthy chapters on the phenomenon known as “share buybacks.” Once illegal—and still a form of undeniable stock manipulation—buybacks reduce the number of a company’s outstanding shares, making each remaining share more valuable. At least on paper. The real value of businesses comes from research, innovation, and investment, not from artificially inflated share prices.
America’s economic decline accelerated last month when U.S. companies announced $166 billion in stock repurchases—the highest dollar value ever recorded for July. The previous July record was $88 billion in 2006, according to data compiled by Birinyi Associates. For 2025 so far, announced buybacks total $926 billion, which is $108 billion more than the year-to-date record set in 2022.
“Corporate America continues to be one of the largest buyers of U.S. stocks and from their actions continues to have confidence in their business, despite unsettling tariff headlines,” wrote Jeffrey Yale Rubin, president of Birinyi Associates.
With due respect to Mr. Rubin, stock buybacks don’t reflect confidence in the business—they reflect concern over the stock price. CEOs overwhelmingly believe their shares are undervalued, and since a major component of executive compensation is tied to stock performance, they’d prefer to massage the numbers rather than invest in long-term growth.
Major Wall Street firms are already advising clients to brace for a potential 15% market correction. For CEOs with compensation packages tied to inflated stock valuations, that’s not just a market event—it’s a pay cut. Enter buybacks: the easiest tool for juicing the optics without doing the work.
This latest surge in repurchases is reminiscent of President Trump’s first term, when corporate tax cuts were supposed to spark hiring and investment. Instead, they fueled a wave of buybacks. For all of Trump’s railing about “rigged markets,” the U.S. stock market is arguably the most artificially manipulated financial system on earth.
Bradley Safalow, a respected market researcher, conducted an analysis revealing that companies with the largest buyback programs within the S&P 500 have consistently underperformed the broader market over the past decade.
“Stock buybacks are a sugar rush,” Safalow warned in a research note. “They’re good for a fleeting pop in the share price, but much like most candies, they tend to do more damage over the long term.”
Scott Chronert, a U.S. equity strategist at Citi, projected that corporate America will spend as much as $1 trillion on buybacks in 2025, an 11% increase over the $900 billion spent in 2024. He also predicts companies will shift spending away from capital expenditures and into repurchases as market pressure mounts—especially amid economic uncertainty and the Trump administration’s trade policies.
Obscuring Decline with a Rising Market
Buybacks don’t just inflate earnings per share—they camouflage weakness. They can obscure the damage caused by external shocks like tariffs or declining demand, while giving CEOs and Trump alike the ability to point to a surging stock market as proof of success.
This January 2020 Harvard Business Review article laid it out clearly: stock buybacks are toxic for the American economy and devastating for the workforce.
And yet, here we are—breaking records again.
Another day, another Delta debacle.
A Delta Boeing 737‑900 carrying more than 100 travelers en route from Las Vegas to Atlanta unexpectedly landed in Augusta, Georgia, where passengers were trapped on board for more than six hours—from 10 p.m. until before dawn. The plane had no air conditioning and overflowing toilets.
While the incident was blamed on weather—something Delta can’t control—it’s the company’s response systems that deserve scrutiny. And this isn’t isolated. Numerous similar incidents have been reported, including one shared by NFL great Benjamin Watson, who posted on X in June that his delayed flight from Guatemala City was diverted to Savannah, Georgia, where it sat on the tarmac from 8:15 p.m. to 3 a.m. before passengers were finally allowed to deplane.
Delta may not be able to prevent storms, but it can prepare for them. Yet a recurring theme in every account is Delta’s poor contingency planning and the indignities inflicted on its passengers.
A Pattern of Failures
This is far from a one-off:
- Emergency landings due to engine smoke and fire (including a recent return to LAX)
- A rash of “mechanical issue” delays
- Aging aircraft across Delta’s fleet
- Heavy maintenance outsourced to El Salvador, performed by low-paid workers
And then there’s the company’s catastrophic IT meltdown in 2024, which canceled 7,000 flights over five days, impacting 1.3 million passengers. In the midst of the crisis, Bastian flew to France to enjoy the Olympics. Delta walked away without penalty, unlike Southwest, which was hit with a $140 million fine and $600 million in refunds for its 2022 holiday collapse.
1980s Tech, 2020s Disasters
Delta’s union says the company still relies on 1980s-era software for crew scheduling, which is why flights often remain delayed even when the weather is clear. When storms hit, the delays cascade for hours—a direct result of archaic infrastructure.
Analysts from Microsoft and a major cybersecurity firm blamed Delta’s 2024 outage on its outdated tech stack. But fixing it? Too expensive.
Instead, Delta’s leadership has chosen the Wall Street-approved shortcut for creating “value”: stock buybacks.
The Buyback Mentality
Delta CEO Ed Bastian took home $27 million in compensation in 2024. In May, Delta authorized another $1 billion in stock buybacks, a move designed to inflate the company’s share price—and Bastian’s bonus. Wall Street applauded.
But let’s not forget: Delta spent billions on pre‑COVID stock buybacks, then came begging to Congress for help because it didn’t have enough money to weather a downturn. Taxpayers—not shareholders—bailed out the airline to the tune of nearly $12 billion. That generosity clearly hasn’t been paid forward.
Delta recently agreed to pay $8.1 million to settle allegations it violated the False Claims Act by awarding executive compensation above legal limits tied to its Payroll Support Program (PSP) relief. Another example of executive enrichment funded by public money.
AI Pricing
Delta has also flirted with using AI to gauge how much customers are willing to pay for a ticket, potentially raising prices based on individual tolerance. After public backlash, the company downplayed those efforts. But the intent was clear.
Meanwhile, basic functions like letting passengers off a diverted plane remain an unsolved challenge.
Not long ago, I called United’s Scott Kirby America’s most despicable CEO. Frankly, Ed Bastian is in the same league —he just hides it better.