Not an easy question. I feel that some firms try and do both, with weighting toward shareholders. Shareholders need a return but you also have to consider retaining your employees. Market forces, such as availability of jobs for your staff working for your competitors, should be considered. However, just because they may not have many other options today, don’t think they’ll forget about it once they do have choices. You can also probably count on the employees knowing about shareholder distributions, even if not the details. Good luck!

Posted by Frank J. Rivelli, GCA International, LLC.