They all have shareholders but they'd be doing the same thing without.
Saudi aramco didn't have shares holders until recently. But it still was creaming the cash from its resources.
This is getting ridiculous (energy prices - Strictly NO referrals!)
- Thread starter DXP55
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They all have shareholders but they'd be doing the same thing without.
Saudi aramco didn't have shares holders until recently. But it still was creaming the cash from its resources.
The market functions on supply and demand. However, such markets are often manipulated by deliberately limiting supply to push up prices.
Also as rightly pointed out by @chrcoluk, it IS the pursuit of a constant massive profit that is driving this. They COULD have chosen to earn less profit and lessen the impact of the current situation, they did not. Why is that? Oh yes right.. Profits.. Shareholder / owner profits.
I didnt say all shareholders are like this though, just in this case this is down to shareholders.
It isnt though. What is driving this is cutting out a massive supplier and a future expected shortage. As I've said before if you want price controls that has to come from governments not companies.
If you honestly think this isnt for the benefit of shareholders, please explain why these companies want to horde all this cash if not for the shareholders? Why are they doing massive share buy backs?
I seen in your reply to Devilman, you kind of admitting it but it just wont click for you, the tendency for people to sell something for as high as the market can tolerate is exactly what I am talking about, if there is more demand yes you can sell for more, but you dont have to sell for more. It is this last bit that for some reason isnt clicking for you.
So many people just routinely sell for as much as they can we have kind of come to accept it as perfectly normal acceptable behaviour. But in certain cases like this it goes too far.
Ah so now you're moving the goalposts. Yes these prices benefit shareholders but they are not driven by shareholders like you claim. If you've got a pension you're probably an evil shareholder yourself.
But it is though. The energy producers have a choice.... In the face of a European-wide energy crisis they can opt to lower their shareholder bonuses, their enormous upper management wage packets and the share buyback schemes and use a portion of that "lost profit" to help *everyone* offset the insane price increases.
They are not doing this though are they? Why is that?
Soldato
The owner of any public limited company is a shareholder. Even many smaller ones have a shareholder even if the person managing it is the main shareholder themselves.
The shareholders in the majority of any decent size are not the senior business managers however.*
* the job title is irrelevant, manager/CEO/CFO/director etc. Those dictating the business strategy is who I am referring to.
Typically when the managers (CEO and downwards) do things that are not in the best interests of the owners you see some kind of friction develop and it can result in the shareholders removing the CEO and/or others.
Its the managers job to do the best thing for the business owners. Literally.
What the managers do (or should do) is balance the best short and long term benefits. IE if there is the opportunity to take excessive profits they need to balance if that will end up as a negative later, encourage further entrants to the market, attract legislation etc
No logical person would attempt to lower corporation tax by reducing profit. Tax % would have to be (marginally) over 100% for that to ever make sense.
Sunak actually did say he wants to do this, but he also correctly said it would require international cooperation as its a global market, so any price controls would need to be global or at the very least regional.
There are many companies who deliberately dont make a profit (or make very little) so they dont pay tax.
Soldato
Because it would be irrational and against the norms for the role that they are performing.
Soldato
In the UK it is a legal requirement for the board of directors at a public company to act in the best interests of the shareholders.
Soldato
Example?
I have to remind you here I am accountant, I have never come across a business that seeks to limit its profit in order to reduce its tax payable.*
* apart from where they are using the tax system to do something like invest, which is behaviour specifically intended by those setting the tax to work that way
Soldato
Yeah good luck getting the Saudis etc to give this more than 10 seconds thought
What is irrational about wanting to lower the burden on your customers to maintain your user base? If prices keep rising more people are not going to be able to pay, meaning less energy purchased and sold, meaning less profits earnt.
There is also nothing "normal" about the role of an energy producer or supplier wanting to profiteer from a shortage at the expensive of every man, woman and child.
Associate
Posted on another forum, people are in for one hell of a shock soon.
Soldato
Totally agree if your outside the capitalist system
Soldato
Those companies do not make a profit because they use their profits to reinvest which is tax deductible.
The reason oil companies are not re-investing into building more production is due to
1) Green people crying about oil/etc
2) many of them went bankrupt recently in the fracking bubble
3) Windfall taxes and communists like you, crying about profits.
The result will be, record low expenditures over the rest of this decade.
Amazon UK subsidiary of Amazon. The margins are very low and some years they paid no tax at all.
Soldato
I think he/she/they/it means when UK child companies buy pencils from a parent company registered in a tax haven. UK profits negligible and tax haven profits maximised. I have no idea if it really happens, but lots of people believe it does.