Shareholders and what they can do

mrutty · Shareholders and what they can do

I'll post this in the Soapbox because Jesse's comments earlier in another thread got me thinking.

What powers/controls do you think a FT100 company shareholder has has?

Leonie2

This is the way I see things. Shareholders have one purpose, to make money. Companies who are controlled by shareholders are driven to increase profits so that their shareholders maintain interest in them. This makes companies focus far more on profits and reducing costs. Reducing costs mean cutting everything to the bone, for example reducing staff to a point where they are unable to cope when someone calls in sick. Companies seem to no longer care for their employees as people, they see them as a necessary comodity to get the job done, how do you otherwise explain or justify the actions of companies (I'm talking the ones who boast profits into the millions) who make a 55 odd year old who has worked for them for 30 years redundant? A caring employer who is not profit driven would do his/her upmost to find a way of keeping that person in employment until retirement age.

I worked for a very large international company. Each quarter the board would have their meeting and if profits were down they'd make redundancies. No sooner would the work pick up and they'd be hiring back the same staff, often at considerably higher salaries. How can a company make decisions from just one quarter of trading? Surely decisions like this (playing with people's livelihood) should be based on a continuing trend and perhaps after 3 or 4 quarters of trading action should be taken. I'm talking about a company whose profits are in the billions.

What power does the FTSE100 company shareholder have? If they don't see a company as making enough profit they'll put their money elsewhere, this is bad news for the company and so they will do everything within their power to make sure profits continue to grow, even if it means devistating the lives of their employees and the local community. It's all down to greed.

Becki · Re: Shareholders and what they can do

Leonie2

I was wondering the same thing Laughing

mrutty

Was that a UK company reporting quarterly? How odd and a waste of time as they only have to report half yearly.

US companies report quarterly and boy their stock market is a tough place to be.

Leonie2

it is a US company mrutty.

Shareholders and what they can do

Re: Shareholders and what they can do