pistor24_JUSTIN TALLISAFP via Getty Images_shell Justin Tallis/AFP via Getty Images

The Legal Gift that Keeps on Grifting

'Tis the season for giving, and major corporations are currently doling out millions, if not billions, of dollars in year-end gifts. But the greatest gift that a corporation can bestow on shareholders is legal: By securing a new corporate charter, corporations can give their investors everything on their wish lists.

NEW YORK – The Christmas shopping season is upon us. Whether one is a believer or not, it is almost impossible to resist the lure to shop and give gifts at this time of the year. But the biggest gift givers are inanimate creatures without any capacity to believe anything. I am referring not to artificial intelligence but to the legal persons known as ordinary corporations.

Corporations are currently doling out millions, if not billions, of dollars in year-end gifts. In the financial sector, bonuses are up 20-35% compared to last year, representing a merry-go-round that puts several hundred thousand dollars, on average, into the pockets of every recipient. Yet while the amount of these gifts is sizeable, the greatest gift that a corporation can bestow is legal. By securing a new corporate charter, corporations can give their investors everything on their wish lists.

Royal Dutch Shell is only the latest corporation making headlines for gifting a new charter to its shareholders, by moving its headquarters from The Hague to London. The company will ditch its royal title in return for extra cash for its shareholders. Two other Dutch corporations, Unilever and RELX (Elsevier), have already made similar moves. And, more generally, many merger transactions are, in fact, thinly disguised bargains for reaping the benefits of a different legal order.

To continue reading, register now.

As a registered user, you can enjoy more PS content every month – for free.

Register

or

Subscribe now for unlimited access to everything PS has to offer.

https://prosyn.org/YRhNPqh