Lloyds shareholders "Furious" - why?

kennyboy66_2

This goes to the heart of what is the agency relationship between shareholders and management.

Operating properly the management is getting paid to carry out the shareholders wishes, however management boards will naturally act in their own self interest rather than that of the shareholders.

Many management boards now seem to operate through a mixture of vanity (Fred Goodwin), political expediency, (LTSB) all mixed up with rapacious greed to gouge as much cash, pensions & share options out of the company while they can.

Small shareholders are effectively irrelevant, as the vast majority of companies shares are held by pension fund & managed funds. The inertia and failure to call management to account by pension funds is staggering, although this is not helped by each individual pension fund holding normally only small % stakes in each company.

Companies such as BP, British Gas, Glaxo, Astra Zeneca, BAT, Rio, Tesco are effectively so large that they are beyond the control of their own shareholders.

I don't know what the solution is beyond breaking them up by government anti-monopoly legislation.

wolvoman

tomterm8 wrote: »

No one forced the Lloyds shareholders to vote yes to the deal. They have only themselves to blame. Everyone could see HBoS was a zombie bank.

Who is 'everyone'?

The LLOY board couldn't. The FSA couldn't. The government couldn't (or chose not to). Most shareholders couldn't.

Ahh I know who you mean - armchair punters like yourself. Tell me again how much stock trading do you do that makes you such a market expert?

tomterm8

wolvoman wrote: »

Who is 'everyone'?

The LLOY board couldn't. The FSA couldn't. The government couldn't (or chose not to). Most shareholders couldn't.

Ahh I know who you mean - armchair punters like yourself. Tell me again how much stock trading do you do that makes you such a market expert?

So, you're telling me that the government overrode competition legislation, gave tens of billions of funding, opened the discount window, and agreed a deal to recapitalise the LLoyds HBoS and buy shares before the merger took place because it was a great bank?

Anyone could see HBoS was a zombie bank. Anyone who looked at the share price as it was plummeting KNEW HBoS was in trouble. The government knew HBoS was in trouble. Brain dead monkeys on the Planet Zhhoka could easily TELL HBoS was in trouble. Even the BBC knew HBoS was in trouble.

You can be as sarcastic as you like, or as rude as you like.

When the government has to override the basic legal framework of a nation in order to merge a company because otherwise it will bring down the economy, that is a clear indication that things are not hunky doory with that company.

LLoyds shareholders got done, but they d***n well ought to have done the research before the merger. They could have sold their shares. If they didn't, they have no one to blame except themselves.