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I think this is quite ironic actually. If I understood the history correctly, being a "shareholder" was a path to a fractional business ownership for people wh
by dijit 10mo ago
I think this is quite ironic actually.
If I understood the history correctly, being a "shareholder" was a path to a fractional business ownership for people who could not afford to outright own a business.
It comes from the same mental position as a co-operative.
In these scenarios, a CEO is really just an employee of sorts for the shareholders.
It's quite funny that we see the CEO of a publicly traded company has worse than a sole-proprietor, when profits will go directly to a sole proprietor- but not to a shareholder CEO.
I understand how it has played out, that the largest companies on earth are publicly traded now, and that CEO compensation in those companies is crazy. But it's quite ironic in my opinion how it played out.
- thaneross 10mo agoGiven the top 10% holds 87% of shares, it seems clear the stock market is primarily a tool to compound wealth. Having a surplus of money is table stakes to play.
- gosub100 10mo agoNot just that, but if it were "fractional ownership in a business" then every profitable company would pay a dividend. Now it has become normalized to not do such a thing with all sorts of fancy reasoning.
- Majromax 10mo agoShare repurchases are also a way of returning cash-flow to owners. A stock buyback is equivalent to a dividend, just with automatic reinvestment in the default 'do-nothing' case. Including buybacks, few large and mature companies fail to return profits to shareholders at all, and we'd ordinarily want growing or startup companies to retain earnings and invest.
- gosub100 10mo agoYou are just reciting the "fancy reasoning" that I already mentioned. All the esoteric stuff is designed to do is concentrate the wealth into the hands of the wealthy. It is a step away from fractional ownership.
- deleted 10mo ago[deleted]
- limagnolia 10mo agoThere is nothing fancy about it. The reasoning is straight forward and has the exact same impact that paying dividends has, from the perspective of the shareholder. (Well, actually in some ways maybe a better impact, as it makes complying with idiotic tax laws easier)
- coldtea 10mo ago>It's quite funny that we see the CEO of a publicly traded company has worse than a sole-proprietor, when profits will go directly to a sole proprietor- but not to a shareholder CEO. Speaking in the same mindset as the parent, we're fine with the profits going directly to a sole proprietor. In fact, what we want is a name attached to the profits, and a not a role. We're not anti-profits. We're anti bland corporate leadership, with no reputational risk and no personal ties to the company (and often no financial risks either, see golden parachutes) - one whose only mission is to maximize profits, product and customers and legacy be damned.
- dijit 10mo agoThis is a totally fair point to make. As mentioned though, the irony is in that, once upon a time, the lords and landed gentry were the "bland, soulless overlords" and so buying things would improve their profits... and nobody could become them. Then the idea of fractional ownership came about and the common man could buy in to an enterprise. Now of course, everyone is correct that this has been weaponised- but it's often interesting to go back to the original intent (or idea) of something to see how warped it has become.