Q: One of the great things about CSU that makes them “investor friendly” is that they don’t issue shares. If they aren’t raising capital by selling shares, what’s the benefit to the board/company being publicly traded?
5i Research Answer:
Shares do at least give the company options if it did decide to make a giant acquisition. But we think the main reason is as a form of compensation (not directly). Senior managers are required to put a substantial part of their bonus into buying shares of the company. Of course, with the big gains this has been a significant source of asset growth for any executives or shareholders. Insiders now own a combined nearly $6 billion in stock. Also, with the stock doing so well a privatization would likely not be 'better' for executive shareholders.