[bell-cot]

> Perhaps the real question isn’t: Why does H-E-B do so many nice things for the state? But: Why aren’t more companies like H-E-B?

> ... in this company’s nearly 120-year history, it’s remained family-owned and operated.

It has been more than a century since the American legal system told publicly-owned companies "Don't Be Good"

https://en.wikipedia.org/wiki/Dodge_v._Ford_Motor_Co.

[throw0101a]

> It has been more than a century since the American legal system told publicly-owned companies "Don't Be Good"

The American legal system did no such thing in the Dodge ruling: as stated in the Wikipedia article itself, the 'pay shareholders' idea was in the obiter dictum (non-binding remark) portion.

And as recently as Burwell v Hobby Lobby, the Supreme Court said:

> While it is certainly true that a central objective of for-profit corporations is to make money, modern corporate law does not require for-profit corporations to pursue profit at the expense of everything else, and many do not do so. For-profit corporations, with ownership approval, support a wide variety of charitable causes, and it is not at all uncommon for such corporations to further humanitarian and other altruistic objectives.

* http://caselaw.findlaw.com/us-supreme-court/13-354.html

* https://en.wikipedia.org/wiki/Burwell_v._Hobby_Lobby_Stores,....

[bell-cot]

Literally, you are kinda correct about Dodge. Practically, not so much. The court's judgement quite effectively ordered to Ford to abandon his rather pro-social plan, the keystone of which was dramatic corporate growth, in favor of giving his minority shareholders a big hunk of the money (needed for that plan) ASAP.

The difference between that decision and "Don't be Good" is that if you have zero greedy shareholders, or are ready for a protracted and uncertain legal battle against them, then you might get away with being good. Otherwise - make sure any seeming good you do is some combination of de minimis and trivial to defend as a tactic to maximize shareholder profits.

(Hobby Lobby is a decision about about closely-held and privately-held corporations, when they are claiming strong religious reasons for policies which a majority of the Supreme Count Justices have very obvious ideological reasons to favor. And also have both the motive and resources to spends years fighting through the Federal Court System. The relevance to 99.99% of the decisions made by corporations is very close to nill.)

[larrydag]

Shareholder primacy is a drain on so many levels. Think of all the R&D that could have been spent instead of buying back shares.

[lotsofpulp]

The share buybacks help offset these big companies’ RSUs for highly compensated employees. The share buybacks also allow shareholders to have a taxable event when they want to, not when the business wants them to.

It would be crazy not to do share buybacks for a growing business.

[infecto]

There are plenty of crappy family owned business that pay too little and expect too much. I don’t know if this is a public vs private company issue.

[bell-cot]

True. Family-owned is "allowed to be good". Not "motivated". And bluntly put, the vast majority of businesses are running on thin margins - they couldn't pay well for reasonable work if they wanted to.

[chomp]

I don’t think that ruling distills down that far. But I will grant you that if you’re leaving enough obvious money on the table, activist investors will come knocking.

[cogman10]

> Why does H-E-B do so many nice things for the state? But: Why aren’t more companies like H-E-B?

Regardless any sort of legal principle, the fact is capitalism rewards exploitation. The more a company exploits, the more profit it can bring in. Whether that be worker or customer.

While it's not stated that way in business management courses, that's exactly how it's taught in a round about way. The entire business class is chasing after efficiency, how to do more with less. And their idols are the likes of Walmart who will shut down a store if anyone says "union" and who aggressively negotiates for tax breaks in every location where their stores go up.

But further, venture capitalists have learned that one of the most effective ways to extract capital is to purchase well respected brands and destroy their quality while sucking off every last bit of value before customers wise up to the impending death of a beloved brand (see Sears, KMart, and basically all of fast food at this point. Also, be prepared to see this in your vet, dentist, and retirement homes).

People make millions doing these awful things which is why they keep happening. It's simply a lot harder and less profitable to make a "good" company which makes good products and respects their customers. And if H-E-B ever sells to a 3rd party, exactly the same thing will happen to them in a heartbeat.

[PaulDavisThe1st]

> The more a company exploits, the more profit it can bring in.

In the short run, that doesn't seem worth arguing with.

It isn't clear whether or not it is really true in the long run. If shareholders (and courts) demanded the long view, it's equally unclear if the exploitation approach could really have taken hold.

[cogman10]

In the long run for who is the question.

It's worked great for walmart for several decades now.

And the venture capitalists continue to use the plunder from prior pillaging to continue the exploit train.

And further when a company achieves monopoly or near monopoly status, it becomes nearly impossible for a competitor to knock them off their perch.

The unfortunate thing is for the people engaged in exploitation this is a great long term strategy. A CEO that does this can almost always land another job as a CEO for another company to rinse and repeat the process. See Mark Hurd.