Quote:
Originally Posted by murraypaul
Shareholders are rewarded through dividends, and the best way to increase dividends is to run a profitable company.
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I agree with almost everything you say in this thread, but felt I had to point out one thing. It's not uncommon for companies (particularly in the tech field) not to pay (or to pay minimal) dividends and for shareholders to get their reward entirely or mostly through stock price growth.
Regulations in many (most/all?) jurisdictions require directors to run the company in the interest of the shareholders, and don't make the distinction between long-term and short-term holders.
That's really just an aside, though - I completely agree with you on your principal point that it would be much better for directors to concentrate on building a sustainable, profitable, growing business and pay less attention to short term stock fluctuation.
The UK used to have a Capital Gains Tax system which encouraged longer-term holding of shares ("taper relief"), but that was stopped in 2008.
/JB