Share Ownership

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  • Share Ownership
    • Divorce between ownership and control
      • The owners are the shareholders
      • The people who control the company and make the decisions everyday are the managers
      • In many private limited companies however the shareholders are the managers
      • In public limited companies the shareholders and managers are often different groups of people and this creates a divorce between ownership and control
      • It is often that the owners and managers have different objectives
      • Can cause conflict
    • Shares
      • Many of the shares of public limited companies are owned by financial institutions, such as insurance  companies and banks
      • Only around 14% of plc shares in the UK are owned by individuals
      • The financial institutions often put pressure on the managers of plc's to pay out a lot in the short term, in order to pay their own shareholders, leaving less funding of long-term investment than managers might want
  • Many of the shares of public limited companies are owned by financial institutions, such as insurance  companies and banks

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