Practical analysis for investment professionals

Shareholder Value


Is Shareholder Value Maximization the Dumbest Idea in the World?

Is shareholder maximization the best way for a company to achieve sustainable success? Are there other parties who should be taken into account? Anjali Pradhan, CFA, tackles the issue in an interview with Robert Walker of NEI Investments.

The Buyback Binge: Is It Good for Shareowners?

They've been dismissed as "self-cannibalization," "corporate cocaine," a recipe for conflict of interest, and a form of stock price manipulation — not to mention short-sighted and counterproductive. But are share buybacks really that bad? We polled CFA Institute Financial NewsBrief readers to see what they thought.

Shareholder Value Maximization: The World’s Dumbest Idea?

Jame Montier made his case against shareholder value maximization during his closing keynote address at the 2014 European Investment Conference in London. In his characteristic iconoclastic style with a generous use of ironic humor, Montier labeled shareholder value maximization the way Jack Welch, the former CEO of GE, had once described it in 2009, as “the dumbest idea in the world.”

Maximization of Shareholder Value: Flawed Thinking That Threatens Our Economic Future

Rather than enriching themselves by buying back stock at prices near all-time highs, CEOs should instead reinvest in their businesses, including their employees. Doing so will drive long-term growth and sustainability for corporations and the economy at large, better balancing the interests of all stakeholders.



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