Financialized accounts: Restructuring and return on capital employed in the S&P 500
In “The Modern Corporation and Private Property” (1932) Bearle and Means observed how, over the period 1880–1930, US owner-managed corporate capital had become increasingly concentrated. Corporate growth had generated a need for substantial additional external financing making it increasingly difficult for owners to retain their majority stockholdings and the ownership of share capital becomes increasingly dispersed. In these circumstances stockholders retain beneficial ownership which includes the right to dividends and capital gains from selling shares in a second hand market but delegate control to a cadré of professional managers thus separating ownership from control. This divorce raised concerns about the ...