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An additional argument against point (5) is that the number of shareholders doesn't matter, but the size of their holdings. A few shareholders at the top own the company, and then at the bottom there is a mass of small shareholders who, together, only own a small percentage of the shares of the company. So when it comes to making decisions, it's those shareholders with a chance of influencing who has a controlling interest that have the power to influence the company's management. And those few shareholders with large holdings can have idiosyncratic reasons for those holdings.  

Those whom the Gods wish to destroy They first make mad. -- Euripides
by Migeru (migeru at eurotrib dot com) on Sun Dec 24th, 2006 at 04:37:43 AM EST
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it's those shareholders with a chance of influencing who has a controlling interest that have the power to influence the company's management.

This is an argument that the soft reform option would seldom be exercised (e.g., only when positive externalities are huge); and this, in turn, argues against wchurchill's concern that it might substantially disrupt incentives.

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by technopolitical on Sun Dec 24th, 2006 at 03:48:07 PM EST
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