The Paradox of Employee (Pension Fund) Ownership of Corporate Enterprises: Imbalances in Power and Responsibility and Transfer of Wealth from Employee-Owners to the Managerial Class

The advent of Pension Fund Capitalism between the 1970s and the 1980s served to carry the separation of ownership from control to the ultimate extreme. Unrestrained by compliant directors or by the new class of employee owners as yet without effective voice, the managerial class felt free to aggressively pursue self interests often engaging in misconduct and malfeasance. This paper looks at the reforms that have been instituted to redress the asymmetries in power which has made possible a massive transfer of wealth from millions of owners to a small class of managerial professionals.