Hello Jason
Thank you for your interesting response.
First I am relieved to hear that Mr. Krishnan was indeed saying what I thought he was.
I loved your income statement walkthrough of stakeholders - I will never look at an income statement the same way again.
You bring up an interesting question - just who is the shareholder in a listed company that I insist management serve exclusively? Is it that fleeting nanosecond investor, the widows and orphans who are beneficiaries of that pension fund that owns a long term stake, or the Davis Fund that has a medium term position?
In my somewhat simplistic view the shareholder is someone who owns the shares of the company at that point in time.
The length of time that this shareholder will own the shares is determined by the investment thesis and model used to make his/her buy decision which will (should) also determine his/her sell decision.
As you have successfully demonstrated, all astute money managers will take profits - meaning that they will cease to be shareholders - some in nanoseconds, others in months or years.
I think management should expend its efforts on ensuring that the future stream of cash flows is expected, by existing and potential investors, to increase, which should lead to an increase in its stock price, which, in theory, should satisfy the interests of both the fleeting and long term investors.
To bolster my shareholder-exclusive-focus cause, I will quote from CFA Institute's excellent publication called the Corporate Governance of Listed Companies "Corporate governance is the arrangement of checks, balances, and incentives a company needs in order to minimize and manage the conflicting interests between insiders and external shareowners".
From my somewhat limited personal experience of being a former owner of a company, and also being an advisor to management and other owners, the word stakeholder is only meaningful to me when used in the context of delivering value to the shareholder. Anything else can result in a slippery slope.
Best wishes
Savio