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> Businesses exist to make a profit for their shareholders. It is an insidious and morally bankrupt myth that this is the only purpose of a company.
by dwaltrip 7y ago
> Businesses exist to make a profit for their shareholders.
It is an insidious and morally bankrupt myth that this is the only purpose of a company.
- senordevnyc 7y agoI didn’t say it was the only reason, and you ignored my question. Would dividends be OK?
- digitaltrees 7y agoDividends that leave the business effectively insolvent in an emergency or financial downturn are irresponsible and should be disallowed. It should be remembered that direct stock by backs were illegal until recently as they were seen as a violation of insider trading and presented conflicts of interest. Further stock based compensation for executives is also relatively new. So we now have a situation that the incentives are clearly aligned for executives to pump stock prices to boost their own compensation through a previously illegal means of stock buy backs. Just look at the ratio of dividends to stock by backs in the last few years. You will see the result of those incentives.
- airstrike 7y agoBy and large most publicly traded companies are not insolvent right now and don't look to be in the near future. For the most part, all that's happened is their stock price is down, some are double-checking if they have sufficient liquidity to weather the pandemic and how long they have, some have drawn on their revolvers, started hiring advisors to rethink capital structure, and some very few are thinking about restructuring.
- stickfigure 7y agoI don't know how you do your financial planning, but when I invest my money, I expect to see a return. I expect most folks do. Everything else falls out of that.
- sho 7y ago> when I invest my money, I expect to see a return If that return is at the cost of the stability and welfare of society at large then sorry, but no. No-one "deserves" a return and nothing happens in a vacuum. Larger society comes first, full stop. Seems this is a lesson we humans forget, and need to collectively and painfully relearn, every few decades.
- stickfigure 7y agoLarger society comes first, full stop. Ah, the rallying cry of 20th-century tyrants. You can justify just about anything with that statement.
- sangnoir 7y agoIf you prefer to think of it in economic terms, you may consider disrupting societal stability as counterparty risk, writ large.
- deleted 7y ago[deleted]
- coldpie 7y agoThis kind of thinking is why some of us are starting to talk about rolling out the guillotines.