this post was submitted on 09 Dec 2024
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I would disagree that that is an example of generational warfare.
The older people get, the less of their money tends to be in actual stocks, and the shares managed by retirement funds are inevitably non-voting, so they can't even voice what tiny bit of opinion their fraction of ownership would theoretically get them.
The "shareholders" being performed for are the managers of those investment funds.
Making obscene wealth on stock investing is relatively rare, but making obscene wealth investing other people's money and then paying yourself an obscene salary out of the proceeds is far more common.
Those are the people who control the massive amounts of money that companies perform for to drive up share prices.
Why own when you can get paid to control? Then your money isn't on the line and you don't need to be lucky to get rich.
Eh it's still a ton. And even then it's in bonds which a good amount are corporate bonds, and guess what the corporation wants to do.
Really doesn't alleviate the pressure of "maximize the shareholder value at all costs". Fiduciary duty is ingrained, it doesn't need to be actively decided on by the board.
And you do get rich from stocks, not that you need to because it's a retirement fund. I think you're barking up the wrong tree trying to pin this on the fund managers. They personally don't even care if the stock goes up, because they get a percent fee no matter what.
My point was more that the corporate behavior is geared towards pleasing fund managers rather than retirees or people with retirement accounts.
The fund manager decides where the money goes, so they're the ones that need to be happy. Yes, legally both the fund manager and the company have a fiduciary duty to the literally millions of people with 401ks that put money into their stock or fund, but in practice it's fund managers who matter.
If blackrock says that all things being equal, they're going to preferentially invest in sustainable companies, suddenly companies have an incentive to make themselves sustainable by whatever metric blackrock is using. Likewise when an investment firm doesn't reduce their stake in an insurance company for harming patient outcomes.
Non-voting means the CEO can be sued by them, but not replaced. It's a different level of responsibility.
I still think your barking up the wrong tree. They are one cog in the machine which demand fiduciary duty.
Yes, but they're the cog that makes choices about where to invest the money.
People with 401Ks who don't know where their money is invested certainly aren't to blame for corporate evil, even if they, as a block, make up the vast majority of shareholders.
Saying the blame for putting money before lives lives not with the people who control how the money gets invested, but instead with the more than 50% of the country aged 24-64 who have a hands off account seems very strange to me.
Why do you think the investment managers aren't to blame ?