There are two problems with this argument. 1. Over the last 5 years, Boeing's stock went down 50% while the S&P500 index went up 85%. How exactly did the share

There are two problems with this argument. 1. Over the last 5 years, Boeing's stock went down 50% while the S&P500 index went up 85%. How exactly did the shareholders benefit from Boeing becoming a shitty company? The common answer to that is something like focus on short-term returns, like quarterly earnings. That makes the hugely simplifying assumption that shareholders are stupid. If you show them good quarterly earnings, you hypnotize them, and they shower you with gold. That is far from true. The vast majority of shareholders have no idea about any quarterly earnings, or about any details of any company, because they own the shares passively through some mutual funds. The top 5 shareholders of Boeing are [1] Vanguard, BlackRock, Newport Trust, State Street and Fidelity. But there are lots of professional analysts, including those at the said mutual funds, who know many more details about companies than you or I can imagine. The myth of the quarterly earnings is just that, a myth. Of course the earnings matter, but if they come at the expense of the long term viability of a firm, the truth comes out quickly. As a CEO you can't just make the stock go up by showing good earnings while secretly dismantling the firm. What's the explanation for Boeing then, you ask? It's the exception that proves the rule. The vast majority of companies have CEOs that are focused on the right balance of short term gains and long term viability. Some of these CEOs are better than others. From time to time you see an example like Boeing, but for the most part you don't. 2. Deploring "shareholder primacy" is fine and dandy until you have to come up with an alternative. The problem with stakeholder value, or contribution to community, or any other heart throbbing sound you want, is that CEOs are smart and they'll figure out how to game that in no time. They are already doing that. Go to any company of any size and see how much they talk about how they help society, how they care about the environment, etc, etc. Do you think there aren't any consultants out there that are more than happy to help you put out press releases about what an angel your company is? Ah, what you want is for companies to be actual angels and not just pretend angels? In that case, it's all good. I'm ok with that. [1] https://www.marketscreener.com/quote/stock/BOEING-4816/company/ https://www.marketscreener.com/quote/stock/BOEING-4816/compa...