america is literally a business trying to make the most profit possible
Unfortunately, this 100% true, and most people don’t truly realize it. In 1919, Dodge sued Ford, claiming that Henry Ford was operating his company under policies that benefitted him and his workers more than they benefitted the shareholders. The court found for Dodge, and ever since, corporations have been enslaved by their Stock Price, and all company policies have to increase the stock price, no matter what. If they don’t put the shareholders first, the shareholders can sue the company.
That forces companies to abuse and under-pay employees, and make immoral corporate decisions because serving the Stock Price is literally the ultimate objective of every corporation. More than a good product, more than quality control, more than utility to the consumer, more than being a moral company who cares about their employees, the Stock Price is literally the only thing that matters, because that’s the law. Ultimately, the only product that any public corporation cares about, is its Stock.
If they don’t put the shareholders first, the shareholders can sue the company.
The thing that gets you sued is not doing what you say you’re supposed to be doing. And that entirely depends on what it says in the corporate charter. A corporation is only obligated to maximize quarterly shareholder returns if they don’t clearly state otherwise. And it’s never been the stock price, it’s been dividends (which drive the stock price). And you’ll notice that quite a lot of software firms don’t turn a profit for many years and pay no dividends. And yet they’re not sued by shareholders, because they openly announced that that was what their strategy was.
Unfortunately, this 100% true, and most people don’t truly realize it. In 1919, Dodge sued Ford, claiming that Henry Ford was operating his company under policies that benefitted him and his workers more than they benefitted the shareholders. The court found for Dodge, and ever since, corporations have been enslaved by their Stock Price, and all company policies have to increase the stock price, no matter what. If they don’t put the shareholders first, the shareholders can sue the company.
That forces companies to abuse and under-pay employees, and make immoral corporate decisions because serving the Stock Price is literally the ultimate objective of every corporation. More than a good product, more than quality control, more than utility to the consumer, more than being a moral company who cares about their employees, the Stock Price is literally the only thing that matters, because that’s the law. Ultimately, the only product that any public corporation cares about, is its Stock.
The thing that gets you sued is not doing what you say you’re supposed to be doing. And that entirely depends on what it says in the corporate charter. A corporation is only obligated to maximize quarterly shareholder returns if they don’t clearly state otherwise. And it’s never been the stock price, it’s been dividends (which drive the stock price). And you’ll notice that quite a lot of software firms don’t turn a profit for many years and pay no dividends. And yet they’re not sued by shareholders, because they openly announced that that was what their strategy was.