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If a company is publicly traded, management is legally obligated to act in the best interest of stock holders and do whatever they can to maximize profits/ mini
by bequanna 13y ago
If a company is publicly traded, management is legally obligated to act in the best interest of stock holders and do whatever they can to maximize profits/ minimize tax obligations.
- derivagral 13y agoNot necessarily true: http://www.europeanfinancialreview.com/?p=6482 http://www.europeanfinancialreview.com/?p=6482
- bequanna 13y agoIt seems to me that short-term performance incentives are the problem here, not the idea that management should be maximizing shareholder value. IMO, when they focus on the short term, Management will make decisions that may not be in the best interest of the firm/shareholders in the long term. It is in their individual best interest to prop up Quarterly numbers, etc. to help their stock options/bonus.