Why Do Companies Go to the Brink of Collapse?
In the News
Thames water in emergency talks, sewage spilling into the sea and other public areas, bills going up and yet.......and yet......72 billion paid out to shareholders.
Please correct me if i am wrong but I was one of the lucky ones taught CPP (Commercial Principles and Practise) at school. I understood that shareholders buy shares at their own risk as bonuses/dividends can go up or down. So why are so many big companies maintaining high levels of dividends while allow their businesses to crumble into disrepair and constantly hiking prices?
The less than wealthy members of society are constantly being forced to pay higher prices for the money grabbing mistakes of the rich...where will it all end?
My own theory is that the bigger the population the bigger the problems. Imagine if we had only 40 million population instead of 60+ million..........over to you!
You have just described "savage capitalism". 100% greed from extremely rich people.
This is why I'd rather pay more for a product from a more ethical company than pay pennies from big companies.
Corporate greed and corrupt government. Paying out huge dividends instead of investing into the service. No appropriate regulation.
It’s ok though as us tax players will no doubt foot the bill and the greedy corporate executives and shareholders will be fine and stay rich and greedy.
Greed. It will be our ultimate downfall. No company providing a public service should be allowed shareholders in my opinion.
As for the Current situation, make an example of them. I think it's time to make shareholders pay for the mess they are making and let it be a warning to other companies that are doing the same.
Midnightflower I agree but surely (if I am correct about shares in my opening topic) they could just suspend all bonuses and dividends for a year and use that 72 billion to pay debt and make repairs. In fact suspend for up to 3 years.
Lynibis that would work. I honestly don't mind how they do it but they should be making an example of these poorly run businesses who believe they can behave irresponsibly and the tax payer will foot the bill. By making shareholders accountable we would ensure businesses served their customers better and hopefully save taxpayers money.
It’s like when Carillion went bust and the contractors all were out of a job but the execs still got their bonuses and even had the cheek to sit in court and try and justify why they deserved these bonuses
Suspending share dividends for a year or two is surely the only option in this situation.
It would be short sighted of shareholders to argue against it.
If you pay the dividends that probably means when shareholders vote on the CEO's performance they will vote to accept his or her huge wage payout.
Thames water owe about £15 billion and interest rates have gone up so more of the money paid by customers is just servicing that debt. Before it was privatised Thames Water had no debt however like many state owned companies they were not efficient and many state companies like this had a long history of strike action through the 70s.
A few countries in the world (not many) seem to be able to run state owned companies efficiently with no strike agreements to maximise value for the tax payer and keep prices down.
Maybe we need universities that purely focus on good management skills and no one can take up a management position without going through a complex and difficult management course that leads to someone who can make the right decisions for a efficient organisation. We also need to make sure there are 'no strike' agreements or legislation. People seem to be against this but we will never turn the country around if we keep letting small sections of people drive up huge costs. The vast majority of people in the UK have never striked and never will. We need legislation that eliminates striking unless there are extreme circumstances. Royal Mail debt has increased hugely since recent strikes causing a need to increase prices and reduce staff numbers and now that debt has to be serviced so really there is less room for wage increases in the organisation.
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