As I understand, shareholder value is the king indicator of company's success. Morevoer, corporations are (kind of) legally oblidged to maximize shareholder's value, are they not? How is can be legally determined whether the board does its best? Can long-term success be easily lost in a collective drive for fast profit margins?
It sounds to me that gaining maximal profit for investors can put a lot of pressure on workers. Is there good evidence that this pressure is increasing? How long were Ford and General Motors were giving "generous" salaries to their workers?
Shareholder value is important in both settings. you point out that the private equity guys may be very short term because they want to make their money as quickly as possible, improve the company and sell it. Yet further up thread someone comments on the pressure on public companies to make quarterly projections, and points out the temptation to eschew the long term to improve the short.
you find good people and good leaders in both settings, imho, and the opposite as well. personally, I don't find a conflict between investor and employee goals. well motivated and well paid employees build unbelievable companies. and leadership, ceo's, should easily be able to make that point to investors,,,and drive for great results. there is not conflict with customers either--innovate, give them quality and service, and they will flock to you. this can be done by private companies and public companies. but it takes strong leadership with intellectual depth, good ethics and values--qualities not always easy to find, + a ton of other qualities.
The goals of investors, employees and customers might be similar, but basic impulses differ quite much.
One other naive question: when people speculatively buy shares in the market while the company is not issuing them, are they really "investing" in a technical sense? No new money comes to company's pocket, it is just appreciation of (presumably) growing value of the company, right?
