Discussion Main / WeCare

I don't know the exact laws but it is forbidden due to the possibility of screwing share holders out of their dividend

It's true in the sense that the officers can't sabotage the company and run away laughing with their bonuses while the shareholders are left penniless. Well, in theory - it sure looks like that's what a lot of them did during the subprime crisis. <_< But anyway, I can see the objection to that quote, because it's misquoting some arcane rules concerning stock manipulation that really don't apply the way the article says. As The Other Wiki says, closely held corporations can and do forego profits all the time, and public corporations can also do so with some financial justification. If things were really as simple as that line suggests, that no "action that would decrease projected profits for any reason" is allowed, then there would be no retirement plans, health coverage, wages above minimum wage, or any other expense beyond the bare minimum required by law. Honest, decent business practices can be justified as more profitable than being For the Evulz, which means wasting extra money to ensure the public never finds out. Not that there aren't plenty of corporations fitting this trope (sure, BP, you really care about the environment), but it's not legally required that they be Lawful Evil.

One could argue, though, that it's economically required for a successful company, since cheating corporations have the advantage on Wall Street because they're cheating, but that's a whole sad topic of its own. It'd be nice if everyone learned their lesson after the last two years of chaos, but I doubt it... :(