"We will protect our shareholders best interests" I thought it was the customer that was important?

[DonRedwood]

After reading the CEO of Papa John's Pizza say "We will... pass that cost (of Obamacare) onto consumers in order to protect our shareholders best interests" it reminded me of something! Business and shareholders have NOTHING if they don't have customers.

I am guilty of purchasing Papa John's in the past (for work functions) but in the future I think I might make the extra drive over to costco to pick up pizzas. Papa John's CEO has made it clear that his company is much more concerned with their shareholders than the lowly customer.

(Though, I imagine his employees do not get paid well and probably do not have health insurance either. I am sure the employees fall far below the shareholders as well)

Boycott of Papa John's, ladies and gentlemen?

[nichomachus]

1. Sorry

Corporations are required by law to protect shareholder interests to the exclusion of everything else. We need to change corporate law.

[JoePhilly]

2. The best way to protect shareholders is to put the customer first.

If you fail that, you have no customers, and your shareholders lose money.

[nichomachus]

4. You are right, but that's not the way it works

All that matters is next quarter's profit -- not the long-term health of the company. Welcome to corporate America.

[JoePhilly]

12. I agree that the quarterly nums are critical, no argument ...

But having worked in the corporate world for a long time, I can tell you that if you take he customer for granted, your quarterly nums will collapse in less than 2 years.

I recently got to point this out to some executives who thought that our customers enjoyed installing and upgrading our products even-though the complexity of doing so was insane.

I'd recommended that we reach out to major customers and offer them FREE services in these areas ... and the risk of quarterly profits was raised as a reason NOT to take my recommendation.

I won the argument and we actually increased our business, customers were thrilled that we wanted to help them complete the install and upgrade efforts. Their adoption rate accelerated.

But I do agree that many corporations can't be bothered to even have a debate like the one I describe. They want to take a formula, plug in some nums, and then go from there ... not that this protects shareholders investments in any way.

[socialist_n_TN]

21. So how much was that Golden Parachute that the CEO........

took advantage of when the the quarterly profits collapsed in two years? The point being, two years is a lifetime in the future for these guys. They want the profits and they want it now. Two years from now they can bail and STILL make out like a (literal) bandit.

[nichomachus]

22. The problem is

that investors are looking for the short-term profit. Many times, these investors are mutual funds, pension funds, etc. They're looking for short-term performance.

They don't care what your pizza looks like or tastes like, as long as they're getting the return on their investment every quarter. One little dip and they will dump your stock like a hot potato.

Also, corporate law requires that the company maximize return to the investors each and every quarter. When the investors ran the company, things were different. Now, ownership and management have been separated. The "owners" may be some hedge fund in Dubai. They don't give a crap what your company will be doing in five years. They want their money now.

This is why our system is so fucked.

[Honeycombe8]

3. Shareholders are the OWNERS of a business. If their interests aren't protected (they make $)...

there is no business. Part of protecting shareholders' interests is making sure there are customers, of course.

Costs of pizzas can go up a bit and there will still be plenty of customers.

[nichomachus]

5. See above

[Honeycombe8]

8. I did. That's why I did my post. The business is owned by shareholders.

Shareholders own a business to make money. It's very simple. If they don't make $, they'll sell out, and the business will close.

Making money is a whole process....having customers, who pay at the right price, keeping costs down, equals profit.

[nichomachus]

17. They need to make it next quarter

Not five years from now. That's what 's wrong with the system.

[Honeycombe8]

19. It's their business to run how they want. You can open your own business and run it how you want.

When you decide you need more money in the business to grow, and invite all your relatives to invest, unfortunately, they will be co-owners and will get a say-so in how the business is run.

If they don't run the business right, people will buy their pizzas from somewhere else.

I guess they're glad that pizzas are one thing that people don't buy from Amazon.

[Trekologer]

6. There are numerous ways to protect shareholder interests

Maximizing profit is certainly in the shareholders' interest but there are multiple ways to get there:

Ensure your prices and product provide a value to customers
Making sure your employees are healthy and therefore productive
Invest in growth programs for future benefit
And others


One way to not protect shareholder interest is to turn your company into a political lightning rod. Perhaps it is time for the shareholders to oust the CEO?

[shanti]

10. exactly, a fiduciary duty to their shareholders

is what corporations have.....and it sucks!

[Wounded Bear]

7. And who are the largest shareholders, typically?

Why the CEO/Executives, of course.

Since Dubya lowered tax rates on dividend and securities income. execs like to take most or much of their pay and bonuses in stocks, options, and equities. You get the drift.

When they say they are "protecting shareholders" they are really just padding their own accounts.

[Honeycombe8]

9. Of course the owners of the business should be padding their own accounts.

That's the whole point of owning a business, isn't it? Shareholders are the owners. They own the business to make money.

[former9thward]

11. Actually no.

The CEO/Executives may be the largest shareholders in small corporations but not in large ones. Pension funds, mutual funds and other investment vehicles are the largest holders.

[NCTraveler]

16. In large corporations CEO's and Execs usually own a very small percentage of shares. nt

[Monk06]

13. John H (Papa John) Schnatter is a big Romney fundraiser and a very wealthy man

Scored 16 in Forbes top richest under forty execs.

He doesn't give a shit about the cost of health care for his employees.

And 16 cents more for a slice of pizza is not going affect his hiring practices or expansion plans.

This 'news' story is just a Romney campaign ad.

Here's Romney at a fund raiser held at Papa John's house.

http://www.celebritynetworth.com/video/mitt-romney-speaks-at-papa-john-schnatters-house-517355343/

[kestrel91316]

14. Corporations gladly screw their customers for the sake of profit, and they do so

every chance they get.

[JaneyVee]

15. Why would corporations that serve a wide, diverse range of people take sides politically?

I'm not talking about corp's like Lockheed-Martin, or Blackwater, etc where they know who and what makes them their bread & butter (mostly whoever vows to be the biggest warmonger), but corp's like Papa John's pizza for example. Why would they step into the political realm, and how would it benefit them to do so? How does Papa John's know that their biggest demographic isn't Democrats & that they may have put the nail in their coffin through boycotts which would harm their bottom line?

It's one thing to quietly donate, but what do they gain by being outspoken and taking sides? I mean, they serve mostly shitty pizza to the general public, you would think they would try to widen their base in order to ensure higher profit margins, instead they take sides and alienate people which in turn would cut into their profits. I for one will never eat there so they can kiss my money goodbye (Although I'm pretty much a health-nut and would probably never have eaten there anyway).

[L0oniX]

18. Typical corporate sociopathic isolatory exclusion.

[Jeff In Milwaukee]

20. A big deal about nothing....

If the cost of cheese was going up, they'd pass that cost along to consumers. If the cost of electricity was going up, that would be passed along. The cost of health insurance is just part of the cost of labor, and so those get "baked into the pie" as it were, and passed along to the consumer.

So fucking what?

Papa Numbnuts thinks that the threat of paying an extra $0.15 for one of his shitty pizzas is going to cause people to demand that we take health insurance away from 40 million people.

Not bloody likely.