I remember hearing about Steve Jobs being forced out of Apple, and the McDonalds brothers being forced out of McDonald’s. In both instances, the method of forcing was a buyout, but I don’t understand how this can be considered “forcing” if they consented to sell their shares. I feel that I am misunderstanding what happened, and just want to know how a shareholder can be forced to sell their stake in a company.
In: Economics
Steve Jobs was forced out as the CEO not out as a shareholder. Just because you own stock in a company does not mean you can demand to be CEO, I can purchase an Apple stock but I can’t demand to be CEO.
It is the board or director that chooses who is CEO and the board is selected by the share holders. It looks like Steve Jobs owned around 11% of the share of Apple at the time so he controlled 11% of the votes. If the represtetative of enough other owners did not want to have Jobs a CEO they can remove him from the post.
Jobs did sell most Apple stocks after he was ousted as CEO but that whas his choice.
Founders often do not own all of the company. If you need investors to build up the company they likely require a share of the company. When you get listed on the stock market there tend to be a lot of shares sold to anyone that what to purchase them.
If you grow a company without outside investors you can own all of it and then no one can force you out as CEO. I think it is enough to control more than 50% of all the votes to be impossible to remove.
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