Shareholder Value and Labor: Observations of an Industry Analyst

Abstract

As a sell-side analyst who has spent his career covering the U.S. aerospace and defense industry, I am in frequent contact with corporate managers and investors, particularly institutional investors. A cherished notion is that managers work to build shareholder value. If they are successful in this endeavor, the stock price of the company will increase and shareholders will be satisfied, particularly if the stock price outperforms broader market indices and its peer competitors. One need only look at the chart in an annual proxy statement that shows stock-price performance of companies and sectors to understand this metric.