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» Normxxx - Re: Re: The Death of the Corporation...

In response to Re: The Death of the Corporation... posted by bob90245:

So the other individuals that Bogle is referring to must be corporate managers and other company insiders. This would infer that 50 years ago those 91% owning all stock were mainly these company insiders and not households.

Well, actually, "insiders," but not todays's kind of "insiders." Today, "insiders" generally refers to "professional management," who may not own even one share of the corporation's stock, and none of whom generally owns a "controlling" interest. "Controlling" interests are owned by "professional management" at various Funds, and who invariably vote with their brethren at the corporation (for reasons outlined by Bogle). If the Fund managers turn sour on a corporation, they "walk." They take about as much interest in a corporation they "own" as a client of Hertz takes in his rental car. Ergo, Bogle's term rent-a-stockholder, for today's shareholder.

In the old days, a substantial "controlling" interest was always held by the "founder" and/or his descendents, as in the case of Ford, and for at least three generations, IBM. Of course, it was considered a working rule that the third generation usually ran the company into the ground. (See, e.g., Ford, but it took a few more generations.) But the founder and at least the first few generations usually took a proprietary interest and didn't just "walk" if things started going sour. They made their voices heard (even at HP and Disney where they no longer held controlling interests). In many cases, as at Ford, they did not hesitate to fire the CEO!

We have discussed this before on this board about a year ago; it is the reason corporation top executives can run a corporation into the ground, all the while voting themselves increased remuneration, with impunity. It is the reason that Bogle is predicting failure for such corporations and for the policies that make this situation possible, and for the societies that enable it. The situation is becoming increasingly out of control, since the only check on the sheer greed of such top executives is shame (which, in our present society, has scarcely had much affect).

And Kirk worries about the "welfare cheats" costing us! Those "welfare cheats" are pretty penny ante besides these corporation crooks, who, unless they get too greedy, have carte blanche to destroy whole corporations together with their shareholders and employees, all the while enriching themselves.

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-- posted by Normxxx