Monthly Archives: June 2012

Who should be rewarded? Employees or Shareholders?


Every Quarter and at the end of each financial year, its the responsibility of all companies to publish their both audited and unaudited balance sheets. I had a chance to go through the balance sheet of a tier-2 IT company. It had reported a profit of 82 crores and for interim dividend alone it allocated 54 crores out of 82. I’m aware that according to stakeholder definition it includes employees and shareholders. But the dividend goes directly to shareholders. So what’s the benefit for the employees who toil hard for the sake of the company. Do the shareholders be rewarded generously for the sake of holding shares? Take the scenario of IT giant Infosys, it missed it revenue guidance and it kept its employee appraisal process on hold stating weak macro economic conditions but rewarded share holders with around Rs.20 as interim dividend.

So all of those who read this article, kindly let me know your opinions on this.