>Sure, but why does the profit have to go to the shareholders?
Because that's how companies are supposed to operate? Broadly speaking, companies are generally expected to pay their gross revenue three groups of people:
1. shareholders
2. bondholders/creditors
3. employees
Employees get first dibs on the cash, but the amount they're expected to earn is capped. Bondholders comes next, and shareholders come last. If there isn't any money left over, they get nothing. In exchange, they also get all of the returns, should the enterprise succeed, as well as control over it.
Because that's how companies are supposed to operate? Broadly speaking, companies are generally expected to pay their gross revenue three groups of people:
1. shareholders
2. bondholders/creditors
3. employees
Employees get first dibs on the cash, but the amount they're expected to earn is capped. Bondholders comes next, and shareholders come last. If there isn't any money left over, they get nothing. In exchange, they also get all of the returns, should the enterprise succeed, as well as control over it.