Why align with owners?

It’s reassuring to find founders who remain committed to their businesses. The best known is perhaps Jeff Bezos – now the wealthiest man on earth thanks to the success of online retail behemoth Amazon.

He is still the chief executive of the company he founded and shaped into a world-leading business. His status as owner should be seen positively by investors and his presence in the boardroom makes Amazon attractive to shareholders.

For Bezos, and others like him, it’s more than just a job, which means they are looking for the same outcomes as investors who buy the shares hoping to see them increase in value over time. It’s called alignment – the bosses and the shareholders want the same things. They are striving for sustainable growth over the long term. If that happens, the share price is likely to rise and the companies will likely pay out dividends.

The advantage of the founders having a stake is that there is no benefit to them of short-term spikes in profits leading to one-off pay-outs. They need to know that the company will grow steadily. That’s also a good sign for investors.

It’s one of the benefits of working with a company that has its roots firmly embedded in a family setting. That’s true of all businesses, whether it’s the corner shop or a multibillion-dollar global outfit.

It’s also why you can be sure that we at Hartey Wealth Management have your best interests at the top of our priority list if you’re looking for financial advice in Shropshire.

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