Kasz216 said:
However they don't reap the benefits of all they own though... there are a ton of complicated tax and criminal laws that specifically govern how much an owner can benefit from a company. If Gabe Newell was the sole owner of Valve, he couldn't decide to say "Fuck it i'm rich" drain the companies entire money supply and close down shop. if he did he'd face huge penalties... both tax wise and criminal wise. |
In corporate structures, the owners of the companies don't go to prison if their companies do evil. In non-corporate structures, they can. Usually in corporate structures, no matter how badly something happens, there are fines levied on the companies themselves. The management seldon goes to jail for anything.
The issue arises in the disconnect between ownership and management. Management gets itself compensated a lot, with golden parachutes and so on, and ownership is asked to keep quiet as they watch stock prices rise, and get dividends for this. The management doesn't think long-term, because they could be fired if there is any short-term downturn. And the management side will often leave before the problems they cause get revealed. There is little to no minding the store long-term here, due to the disconnect.