One of the reason why companies distribute dividends is that when a big pot of cash starts to accumulate, there end up being a lot of people who feel entitled t

One of the reason why companies distribute dividends is that when a big pot of cash starts to accumulate, there end up being a lot of people who feel entitled to it. Employees might suddenly feel they deserve to be paid a lot more. Suppliers will play a lot more hardball in negotiations. A middle manager may give a sinecure to their cousin. And upper managers can extract absolutely everything trough lucrative contracts to their friends and relatives. (Of course the IRS would clamp down on obvious self-dealings, but that wouldn't make such schemes disappear. It'll make them far more complicated and expensive instead.)