“Smashing Neoliberal Finance: Stocks and Shareholders,” by Frédéric Lordon, first appeared on 11 June 2026, under the heading “Politics of the Financial Crisis – 4,” as part of “La pompe à phynance,” Lordon’s column in Le Monde diplomatique. Also read on Communis: “Smashing Neoliberal Finance: Banks, Credit, Debt,” “Smashing Neoliberal Finance: Principles and Methods,” and “A Window of Historic Opportunity.”

“We must not teach shareholders moderation—they are incapable of it—but force them to practice it. By hitting them where it hurts: through TSR, that isTotal Shareholder Return. ‘Hitting them’ here means capping it: or SLAM—Shareholder Limited Authorized Margin. This consists of establishing a normative baseline for authorized shareholder compensation, measured in terms of TSR, and capping anything that exceeds it. It’s that simple. We haven’t invented anything: the ever-present Georges Marchais had already come up with the formula, albeit in the context of income taxation: ‘Above 400,000 francs, I take it all.’”

—Frédéric Lordon

We were discussing the banking system and the bond markets, which have just taken a major hit. What about stocks? First, let’s look at them from the savers’ perspective—specifically, the wealthy. With enthusiasm for bonds having cooled somewhat, might these fortunes turn to investing in stocks? Indeed, that would not be impossible. However, they must be made aware, once again, of the new conditions that come with this possibility. The fact is that the path of equity, as it has been shaped by neoliberal finance, is no less toxic than that of debt. And this toxicity manifests itself through two effects, each as pernicious as the other.

The Scourge of Liquidity

First, the effect of liquidity. Liquidity is the sacrosanct property of neoliberal finance, the “thing” it must preserve above all else—the very thing we are going to deprive it of. It’s understandable why it clings to it: liquidity guarantees the satisfaction of financial desire in its slightest fluctuations: I want it, I buy it; I no longer like it, I sell it right away; I want something else, I buy something else; I want the first one again, I buy it back. And this at any moment. Behind the “technical” concept of liquidity lies a desire-driven proposition—one might even say an irresistible, instinctual proposition—made to those in the financial world. The ideology of neoliberal finance justifies liquidity through the “fluidity” of capital allocation. As if the allocation of capital—within companies—had to be replayed at every moment. And even: as if it could be. The ideology also states: savers will only be persuaded to invest in a company if they are given the opportunity to reconsider their investment and withdraw from it. At any moment. Neoliberal finance has therefore developed a rather peculiar notion of commitment: measured in nanoseconds. Since that is the timeframe of transactions now permitted by flash trading. There you go: I commit. One nanosecond later: actually, let’s part ways as good friends.

Liquidity is concretely tied to continuous trading. Continuous trading: a typical example of those technical and abstruse contraptions to which no one pays the slightest attention—for which, as Sandra Lucbert would say, no one breaks out the guns. Yet it is of considerable, structuring importance—instituted in two stages, in 1986 and 1989, by finance’s best friend, as always: government socialism. Of foundational importance, indeed, since it establishes a general timeframe for finance’s control over companies: one that is extraordinarily compressed. It is no coincidence that continuous trading was quickly accompanied by the practice of quarterly reporting, to which large publicly traded companies found themselves compelled. It is not that one cannot exist without the other—as evidenced, somewhat unexpectedly, by Trump, who is considering abolishing the requirement for quarterly reporting!—but that the two, together, clearly form a coherent whole in the distortion of economic timeframes. Every quarter, therefore, companies have had to present their results, as if such an assessment made any sense at all given the actual timeframes of investment—physical investment!—innovation, or strategic revisions. Yet these quarterly assessments have very concrete effects: continuous trading reacts to this new information. The fact that these results are inherently meaningless does not prevent them from causing price movements—sometimes substantial ones—when, for example, situations arise that trading floors have come to call “profit warnings”: namely, when the announced quarterly results fall short of what had been projected. A quarterly result… That is to say, a “data point” devoid of any economic significance. On the basis of which, nevertheless, investors will make decisions—to buy or sell—that will lead to potentially significant fluctuations in stock prices.

But who might be interested in these fluctuations? In fact, everyone. Even employees, who are passive spectators in a game that can engulf them with terrible force. For example, if company executives, worried about seeing their stock price plummet, decide to come back the following quarter with results that are, this time, spectacular. How were those results achieved? As usual: through a combination of increased productivity and reduced payroll.

Needless to say, the bosses have a stake in this, too. But the question is how. Of course, because they’ve been turned into shareholders through stock options—a direct interest. But even more so, because the stock price is their key metric: the one that determines their chances of staying in their positions—or being ousted. Being valued highly on the stock market is the best way—in fact, the only way—to deter predators: the hostile takeover bid. The one that will decapitate the management team to install the new owner’s clique in the still-warm seats. So the incumbent executives, to hold their ground against the lurking predators, drive the entire company to the limit, forcing it to deliver the strong return on equity that produces the strong quarterly reports that drive up stock prices that satisfy shareholders that keep predators at bay that allow executives to rest easy. And the mistreated employees.

Back to the opening price

So all of that is also part of the “obscure stuff” of continuous trading. Even though it is, above all else, the prerequisite for speculative frenzy: the condition for trading and re-trading at any moment—if necessary, every nanosecond—while prices adjust instantly. All the reasons, therefore, point to putting an end to it. However, when it comes to stocks, the holding principle—which applies to bonds—cannot be applied as is. This is because the principle of holding requires that the security be retained until maturity; yet, while bonds, by their very nature, have a maturity—the maturity date of the loan of which they are a part—stocks do not: they are securities with a formally infinite maturity. Stocks are non-repayable advances. One can compel an investor to hold a bond for 1, 5, or 10 years. One cannot compel them to hold a stock for life. It is therefore a matter of determining the conditions under which they will be authorized to dispose of it. This condition has a name: the fixing.

This is how the stock market operated before continuous trading: buy and sell orders were collated throughout the day, and intermediate, fictitious prices were revised as orders came in, until the trading day came to a close. Then the counters were stopped—that is, the price-revision process was halted—and the price was set at its final value. All recorded transactions were then executed at this fixing price. Instead of a price updated every nanosecond and continuous trading, there was a single price for the entire trading day, which concluded with the execution of all orders placed. One price. For the entire day. This effectively meant that securities were held for at least that entire day, since transactions could not take place until the fixing had occurred.

It is to this principle of the fixing that we must return. For a reason that is both simple and profound: it is this principle that determines the temporal framework of trading. The frequency of the fixing is therefore a critical parameter when it comes to restructuring the temporal frameworks of finance—in this case, to “de-short-termize” them. One could, for example, consider a quarterly or annual fixing. An annual fixing would be ideal, to ensure equal treatment with bond holdings, for which the shortest maturity has been set at one year. A frequency shorter than annual would not be a bad idea either, to potentially encourage savers not to put all their money into bonds. In any case, requiring investors to hold their securities for an entire year (or half-year, or quarter), without being able to sell them in the meantime, is the bare minimum meaning we can ascribe to the concept of financial commitment. One might argue that a lot can happen in a year, and that during that time we’ll be deprived of the ability to react—meaning: to bail out. That’s true. Once again: just like banks with their loans, just like investors in private credit funds. Objection overruled, then.

Let’s remember that in this new financial system, the investment options offered to savers will be very few and highly standardized; that investing in stocks will, as it does today, apply only to the top percentiles of the saving population; that it will (and will remain) a game for the wealthy; and that we will not allow a game for the wealthy to destabilize businesses. On the other hand, one could envision differentiating investors based on the holding period they agree to, obviously starting from the minimum annual lock-in period. Several advantages could serve as incentives for this extended holding period. For example, multiple voting rights to be exercised at general meetings. Whereas standard shareholder participation is governed by the “one share, one vote” principle, the participation of investors with a long-term commitment could be N votes per share, where N > 1. The same applies to dividends, which could also be weighted by coefficients proportional to the holding period.

SLAM

Dividends… It’s time to talk about them. The primary scourge of shareholder finance lies in the pernicious effects of the sacrosanct principle of ownership—liquidity: a prerequisite for speculative frenzy and a dramatically short-sighted distortion of economic timeframes. Liquidity “speaks” only to the interests of finance, and in no way to those of production. However, it is when we get to the remuneration of financial capital that things really get tough—and, given the current neoliberal state of affairs, obscene and scandalous. All of this is well known, so there is no need to dwell on it. Or so one might think. Quite some time ago (2013), a talented team from the Lille Center for Sociological and Economic Studies and Research (Clersé) produced a groundbreaking study that estimated the cost of capital for businesses—in fact, to introduce into the economic debate the idea that there was more to it than just the cost of labor, the delightful obsession of all the neoliberals in the press and among employers, harped on endlessly to the point of saturation—but also a cost of capital, which is sky-high and which, surprisingly, is never the area where efforts are made to cut costs to make businesses competitive. Even though that’s exactly where they should be looking. That was 13 years ago, and, even more surprisingly, no account has ever been taken of this work or of those who, before or after, called for us to consider looking in this direction. This in no way prevents the bourgeois press, year after year, from publishing the ever-breaking records of dividends paid by CAC 40 companies to their shareholders. Only to do nothing with them.

National accounts confirm this growth in the share of dividends in total value added, though less dramatically than one might have expected: from 3% in 1990, the share of dividends in the value added of non-financial corporations (NFCs) rises to 5% in 2023. We must not be misled by these seemingly modest figures, which might suggest that we are dealing with a phenomenon that is, all things considered, benign. First, it is reasonable to assume that, when limited to the CAC 40 or even the SBF 120—that is, within the subsets where the concept of shareholder capitalism takes on its full meaning—the same picture would be far more striking. Second, and more importantly, it is from this pinnacle of French capitalism—where shareholder control is most rigorously exercised—that demands for financial profitability are issued and disseminated throughout the entire productive system via subcontracting relationships. At these lower levels of the productive structure, there are hardly any dividend bonanzas, and for good reason: the productivity demands—though extremely harsh—imposed on workers are entirely focused on the continuous reduction of subcontracting prices, so that potential financial profitability is captured by the principal contractors, who concentrate it after having siphoned it off and channeled it upward through the layers they dominate, all the way back to themselves. All this is done to line the pockets of the “major shareholders”—institutional investors, banks, and funds—who frolic on Euronext Paris, the new name for the “Paris Stock Exchange.” Capitalism—French in this case, but this holds true for all forms of neoliberal capitalism—is therefore nothing more than a massive extraction of labor’s efforts by shareholders across all levels of the productive apparatus.

Finance may be a complicated matter, but everyone has come to understand that the financial profitability requirements imposed on companies are the very principle behind the endless squeezing of workers. And that is obviously where the stop must be put. How? The program L’Avenir en commun already puts forward one or two ideas, such as: a ban on companies paying dividends if they have laid off workers or received public aid; and a ban on paying dividends that exceed profits . All of this is the bare minimum. But it does not solve the problem in its entirety. The harm caused by shareholder-driven capitalism extends far beyond these few specific cases, and it is the system as a whole that must be addressed.

So, once again: how? Through taxation. More specifically, through a tax that caps shareholder returns: the TSR, or Total Shareholder Return. The TSR is a rate of return—total in the sense that it attributes to the financial capital the entirety of the gains generated by the investment: in the form of dividends, of course, but also including capital gains. The advantage of using TSR as an indicator of shareholder returns lies in the fact that it includes not only dividend payments but also all other expenditures that companies incur for the benefit of shareholders. Notably, this includes share buybacks—a form of madness entirely unprecedented in the history of capitalism, established by its neoliberal, financialized form. A completely “rational” madness, in truth, if we’re talking about rationality dictated by the state of the structures: in this case, for a company, buying back its own shares is a transaction with accretive properties.

In financial jargon, “accretive” is the opposite of “dilutive.” Dilution occurs when new shares are issued. It is indeed dilution, since the same amount of profit will be spread across a greater number of outstanding shares. Less earnings per share: shareholder discontent. Conversely, buying back shares to cancel them is a way for the company to reduce the number of shares outstanding, thereby distributing the same profit among fewer shares and increasing earnings per share: accretion. And this earns the shareholders’ full approval. Since reporting higher earnings per share is considered the best driver of rising stock prices. WNTBA – What Needed to Be Achieved.

Sébastien Tixier, an engineer, specialist in industrial issues, and parliamentary aide, amuses himself in private (he should publish!) by compiling a highly enlightening CAC 40 database, which confirms—in a thoroughly documented and up-to-date manner—what we’ve known since the late 2000s: namely, that shareholder-driven absurdity has reached that characteristic tipping point where companies end up paying out more to shareholders than the shareholders—who are, after all, supposed to finance them—contribute to the companies. “More” is actually an understatement. Between dividends and share buybacks, the net financing of CAC 40 companies by their shareholders has turned negative—and not just a little: nearly 100 billion euros by 2025. Let’s put it another way: it is no longer shareholders who finance companies—as the gospel of market finance has been preaching for ages—but rather companies that finance shareholders, which is a situation that is literally turned on its head. And all of this is driven by the sole motive of pleasing shareholders—that is, to retain their favor, thereby further propping up the stock price, and thus warding off the predatory specter of a hostile takeover bid.

Since we’re on the subject, let’s mention this in passing: “unfriendly” takeover bids—as they’re called in the hushed language of finance—will be outright banned. It’s very easy to identify them: just ask the target company! Is it willing to be acquired? Answer “yes”: friendly takeover; answer “no”: unfriendly. Period. Banning hostile takeovers is one way to partially relieve management teams of the pressure to keep the stock price as high as possible in a predatory game where it is the decisive factor in survival. That’s one less factor that will take a toll on the productivity gains demanded of employees.

But this is still far from enough to loosen the shareholders’ grip. As we’ve said, this grip enjoys the active collaboration of the CEOs themselves, since stock options effectively align their interests with those of the shareholders. These compensation methods—which enable top executives to amass fortunes that their “mere” salaries, already extravagant, would never allow them to attain—will be outright banned. Here again, we’ll let the “brain drain” rant to its heart’s content. Carlos Tavares is leaving (or being let go from) the helm of Stellantis after receiving 47 million euros in free shares upon arrival and leaving behind a 22-billion-euro deficit upon his departure: a “brain” we could have done without. In any case, there’s no reason to regret his departure. He is not alone in his kind—the kind we can do without, the kind we might even be tempted to show the door. There must be equally capable people, just below them, for whom the prospect of power might well be enough, and who would adapt to the new game where obscene profits are no longer off-limits. Moreover, exorbitant compensation is inextricably linked to heroic individualist myths, and fails to recognize that when a “mastermind” leaves, they are most often very advantageously replaced by a collective that thinks at least as well.

With hostile takeovers banned and shareholder incentive packages eliminated, there are still too many incentives for companies to go to great lengths to attract shareholders in the hope of boosting equity. This is not incomprehensible—but it should not be allowed to run rampant without any limits. Consequently, we must not teach shareholders moderation—they are incapable of it—but force them to practice it. By hitting them where it hurts: through the TSR. “Hitting them” here means capping it. Here is the SLAM (or rather, here it is again, because this, too, isn’t entirely new—2007…) : Shareholder Limited Authorized Margin—or, in French, Marge Actionnariale Limite Autorisée, though the English acronym rolls off the tongue better. SLAM consists of establishing a normative baseline for authorized shareholder compensation, measured in terms of TSR, and capping anything that exceeds it. It’s that simple. We haven’t invented anything: the ever-present Georges Marchais had already come up with the formula, albeit in the context of income taxation: “Above 400,000 francs, I take it all.” Here, it’s the same. The effects, however, are more powerful: the pressure for profitability—otherwise undefined—that shareholders exert on companies, and thus on workers, becomes pointless once any additional effort, convertible into profitability for the shareholder, ends up being seized by the tax authorities.

The normative threshold, beyond which the SLAM’s tax axe falls, is fairly simple to establish, and—ironically—will be borrowed from the intricate workings of finance—but turned against it. We will therefore consider that the normative rate of return on invested equity capital is equal to the interest rate on a so-called “risk-free” asset (generally a benchmark Treasury bill) plus a risk premium, calculated, for example, according to the most commonly used asset valuation model, the CAPM (Capital Asset Pricing Model). A shareholder is therefore entitled to earn the normative rate of return, and after that, “I take it all.”

Although autonomous in principle, the SLAM is closely tied to the closing price in practice—in reality, continuous trading would pose formidable difficulties for it. Things are even perfectly straightforward if the fixing is annual (which may cause some confusion among financial readers), thereby coinciding with the fiscal year. The dividends paid are known, the capital gain realized is established at the fixing, and the effective TSR is therefore perfectly determined: the axe can fall. For sub-annual fixings (semiannual or quarterly), and in the event that the investor has sold the security before the end of the fiscal year, it will suffice, for example, to include the previous year’s dividends in the TSR calculation—or an average of those dividends and the current year’s dividends (even if this requires a correction after the fact).

Outcries and gnashing of teeth

People are already screaming in every direction—calling it madness, a scandal, incompetence, or even murder—of talent, innovation, growth, just about everything. Yet the truth must be told: all of this is still exquisitely gentle. It would be hard to pass this off as bloodthirsty communism.

Let’s admit a touch of cunning: we’re delivering the package in question in small installments, for a gradual build-up of pleasure. Knowing full well all the outbursts and vehement objections that each installment immediately triggers—which we’ll address with the same gradual approach.

In any case, the next installment: closing the stock market—that’s sure to cause quite a stir.

Feature image: “Dante and Virgil in the Ninth Circle of Hell” by Gustave Doré. Oil on canvas (1861). Municipal Museum of Bourg-en-Bresse. Wikimedia Commons.

Translated from the French original by Rolando Prats.

Frédéric Lordon