The market for corporate control, exemplified by mergers, acquisitions, hostile and friendly takeovers, and all manner of complicated transactions â€” reverse triangular mergers, statutory short-form mergers, cash buyouts, etc. â€” designed to skirt otherwise-mandatory shareholder votes and statutory obstructions, often is the only incentive for managers to pursue diligently corporate efficiency and profitability.
Reputation and credibility are often enough to induce managers to perform well. When this is not the case, the threat of losing one’s job certainly lights a fire under even the most complacent corporate officer.
And yet, in the guise of coming to the rescue of hapless shareholders (who, incidentally, rely on the expertise of analysts who buy securities for large institutional investors such as retirement funds, mutual funds, and insurers), in gallops the valiant SEC and state legislatures to save the day. FULL ARTICLE