Editing Shareholder value (section)

=== Company criticisms ===

==== End of corporate responsibility ====
In [[Milton Friedman]]'s seminal piece advocating for shareholder value titled "[https://www.nytimes.com/1970/09/13/archives/a-friedman-doctrine-the-social-responsibility-of-business-is-to.html The Social Responsibility of Business Is to Increase Its Profits]" makes the argument that the business of business is its business. Friedman's postulation suggests that if social responsibility and profit run counterintuitive, pick the latter. By prioritizing the accumulation of wealth by all means, it uncomplicated other responsibilities that may have a hindrance to achieving this goal. Some responsibilities include, but are not limited to: community development, employee investment, worker benefits, research and development, and more. These responsibilities are attributed to being long term and do not immediately satisfy the short term – and mainstream – interpretation of shareholder value.<ref name=":2" />

==== Stock buyback ====
{{Main|Stock buyback}}
[[Stock buyback]] is criticized for its extractive nature which takes profit and uses it to make stocks look more profitable than they might be in the name of shareholder value. In 1982, the U.S. Securities and Exchange Commission ([[U.S. Securities and Exchange Commission|SEC]]) implemented Rule 10b-18 of the [[Securities Exchange Act of 1934|Securities Exchange Act]], thus allowing for corporations to buy back stock under certain thresholds and circumstances. With low investigation and consequence rates for breaches, as well as loopholes, this opened up opportunity to legal stock price manipulation. With SV theory incentivizing the shareholder and tying executive pay, the stock price became intrinsically tied with success as critics note. One notable effect of this practice includes reduced investment. From 2003 to 2012, of the 449 firms in the [[S&P 500 Index|S&P 500]], 54% of earnings went to stock buyback and 37% to dividends. This leaves 9% of earnings to go elsewhere, a reduction from the previous rates of investment in past decades.<ref name=":8" /> Economists like Lenore Palladino point out the eventual consequence when this bubble will burst, the majority of Americans will face the consequence, not the ones leading the firms.<ref name=":7" />