Public Corporations are Big (but not necessarily Mega) Businesses that sell Stock (shares of participation in the Profits of the Company) to raise Capital and finance their activity. These Shares are traded in a Public Market either in exchange for other Shares (thus the term “Stock Exchange”) or directly for money. In the United States and other developed countries there are rules and regulations that control the Public disclosure of information about the activities of the Company and its Profitability (or not), and that prevent Share Owners from trading them based on information that is not Publicly available (Insider Trading).
Most, but not all, Public Corporations practice what is called Corporate Democracy which can take many complicated forms but is idealized in the simplest case as each Share Holder gets a vote for each Share on important Company decisions like who sits on the Board of Directors that runs the Company and whether they should buy another Company or sell theirs.
Even in this very simple case there are nuances. Among other things Majority Ownership is not necessary for effective control. Quite small Minorities, if concentrated, can run things even if there is a Majority opposed provided Shares are widely distributed and therefore difficult to co-ordinate and/or there are a large number that are indifferent to the outcome.
Unfortunately that is frequently the case. CEOs generally pick and choose their own toadies to stack the Board of Directors which, among other things, usually decides Executive Compensation.
Back in the day Labor Unions (I’m talking waaay back here, I know) would sometimes negotiate partial ownership positions (Shares) as a form of non-monetary compensation. This caused great consternation among true Capitalists.
“Outrageous!”, they would sputter. “What prevents them from just voting to send their own Wages through the roof?”
So in many cases the Union would accept non-Voting Shares and simply park them in their Pension Funds and hope that as Company fortunes prospered they would rise in value faster than Interest Income or other Investments.
My point is- how different is this from the current situation where CEOs write their own ticket for a degree of Mismanagement and Laziness that would make a featherbedding member of the Jetsons 1 Hour Of Buttonpushing A Day Union, Local 127 blush?
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