84 C L Loss E CowETT supra note 82 at See CAL CORP CODE 25100o West

84 c l loss e cowett supra note 82 at see cal corp

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84. (C. L. Loss & E. CowETT. supra note 82, at 327-29. 85. See CAL. CORP. CODE § 25100(o) (West Supp. 1968). 86. An analogous possibility to governmental review is review by an independent non- governmental institution. See, e.g.. Buxbaum, Preferred Stock- Law and Draltsnan.l.hip, 42 CALIF. L. REV. 243, 306-09 (1954); Rostow, To Who,, and Jor What Fnds is Corporate Management Responsible?. in THE CORPORATION IN MODERN SocII-TY. %upra note I. at 57-58. 70-71. [Vol. 57: 1
MODERN CORPORATE DECISIONMA KING publicly held corporations have no interest in participating in corporate affairs at any level, so that such an approach would be of only theoretical import. As Manning puts it: It is clear beyond question that shareholders as a lot have little or no real concern with ... the "fundamental" transactions. . . . It is commonplace to observe that the modern shareholder is a kind of investor and does not think of himself as or act like an "owner." He hires his capital out to the managers and they run it for him; how they do it is their business, not his, and he always votes "yes" on the proxy." Certainly this premise is a widely shared one. 8 But to what extent is it true? 3. Shareholder Expectations (a) The AT&T myth.-ln the absence of any hard data concerning the expectations of shareholders in- publicly held corporations, the following assumption, which would probably find general acceptance, will be made: The extent to which a shareholder in such a corporation expects and wants to participate in structural decisions is intimately related to the size of his holdings. Therefore, one method of investigating the expectations of such shareholders is to explore the size of shareholdings in publicly held corporations. In discussing shareholder expectations from this perspective, most commentators have taken as their model AT&T or GM. 9 In terms of number of record shareholders, at least, these corporations are not very typical. AT&T has over three million shareholders, and GM over 1.4 million."' In contrast, no other corporation seems to have more than 750,000 shareholders, and only eight others seem to have more than 250,000."' However, the real question as to the typicality of AT&T and GM is not how many other corporations have a like number of shareholders, but how many others have a pattern of stock distribution such that the shareholders will not expect to participate in structural decisions. Unfortunately, there are only a handful of studies relating to intracorporate stock distribution, and even these have generally 87. Manning, supra note 34, at 261. 88. .See. eg.. Mason. Introduction. Tin: CORPORATION IN MODI-RN SOCIETY..tupra note I. at 2 ("The equity owner is joining the bond holder as a functionless rentier"). 89. See. e.g.. Chayes, supra note 30, at 25; Dion, supra note 34, at 611; Hornstein, Corporaie Control and Private Property Ruies. 92 U. PA. L. RIv. I, 3 (1943).

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