Editing Talk:Share (finance) (section)

== Shareholders do not own the corporation ==

Shareholders of large public corporations are not the owners of the corporation. Ownership is determined in law as based on a bundle of rights and duties (See Honore' 1961). The typical shareholder has none of these rights and duties.

This fact that shareholders of large public corporation DO NOT own the corporation is explained in Company Law and The Myth of Shareholder Ownership by Ireland (1999) (See http://kar.kent.ac.uk/1939/1/Myth_of_Shareholder_Ownership.pdf), Shareholder Ownership and Primacy by Velasco (2010) (See http://illinoislawreview.org/wp-content/ilr-content/articles/2010/3/Velasco.pdf) and Bad and Not So Bad Arguments for Shareholder Primacy by Stout (2002) (See http://www-bcf.usc.edu/~usclrev/pdf/075504.pdf)

Also, see the book by Stout (2012) called The Myth of Shareholder Value, Greenwood (http://people.hofstra.edu/Daniel_J_Greenwood/pdf/Hofstra.pdf). There are a lot more I will cite if needed.

Only if shareholders have control of the corporate decisions can they possibly be considered owners. They do not. Their vote in practice is ineffectual in determining Board of Director composition. Professor Bebchuk studied proxy contests conducted by all listed companies between 1996 and 2004, finding that only 17 corporations, with a market capitalization over $200 million, experienced proxy contests to replace management outside of the takeover context. Of these, only 2 of the insurgents won. “A plausible interpretation of the evidence is that, even when shareholder dissatisfaction with board actions and decisions is substantial, challengers face considerable impediments to replacing boards.” (Bebchuk 2005 p. 13)

The bottom line: Shareholders of large public corporations are NOT the owners.[[User:Sigiheri|Sigiheri]] ([[User talk:Sigiheri|talk]]) 01:19, 5 May 2013 (UTC)

:This discussion (if you could call it that) is all ready under way at [[Talk:Corporation#Shareholders do not own the corporation]]. — [[User:Blue-Haired Lawyer|Blue-Haired Lawyer]] <sup>[[User talk:Blue-Haired Lawyer|t]]</sup> 11:13, 5 May 2013 (UTC)