emmanuelewumi:



People own shares through proxies, the best bet is to grow organically although it is very slow and then maintain 51% ownership of the company.

Will you rather own 7% of a $1 billion Company or 65% of a $100 million company.

The $1 billion achieved the feat in 5 years, while the $100 million company achieved the feat in 10 years.

If founders of GTB and Zenith Bank wanted to have 51% ownership of the banks, the banks won't be make profit of N200 billion in 2020, probably they will be making N10 billion or thereabout

65% of 100m and I go grow am over time

emmanuelewumi:
Depends on your scope of growth.

How did Dangote then achieve this massive growth, while controlling most of his concerns? I would love to have an insight about that.

Pls if one has a unique business idea, what are the steps such can take to establish the business?

Pls do help with ur educative points

phazotron:


65% of 100m and I go grow am over time

Different strokes for different folks, I am okay with 1% Zenith Bank than with 100% of a microfinance bank.

Your 1% ownership of Zenith Bank would have fetched you a dividend of N900 million in 2020


While the microfinance bank might not make a profit of N100 million in 2020

Afromentalist:

How did Dangote then achieve this massive growth, while controlling most of his concerns? I would love to have an insight about that.

Don't compare yourself with Dangote.

As far back as 1940, his grandfather was the richest man in West Africa and biggest customer of British Bank of West Africa now called First Bank.

Read "the making and makers of Nigeria's private enterprise" by Tom Forrest

emmanuelewumi:



Don't compare yourself with Dangote.

As far back as 1940, his grandfather was the richest man in West Africa and biggest customer of British Bank of West Africa now called First Bank.

Read "the making and makers of Nigeria's private enterprise" by Tom Forrest

I think you misunderstood my question.

I did not dispute any of your proposals, I actually quite agree with them. Second, I do not compare myself with anyone, certainly not Dangote.

I was simply asking if you have any clue as to which strategy he used to be able to grow that exponentially, without having to forfeit much of his equity.

Finally, I am well aware that Dangote is the grandson of a very wealthy man, but as far as his own empire is concerned it is usually claimed that he did not enjoy much funds from the family save a 500K loan from a relative. Hence the question.

the minute u lose control of a company, u seize to be the owner. the key word is control... which u can only have if u own 50.1%. where all shareholders own less than 20%, 18% etc... then there's no clear owner... the board can play them against each other. \

ThierryJay:


What if no individual shareholder owns more than 20% equity? In such case, the highest shareholder will not have controlling votes and can be voted out by other shareholders or the BOD if he holds an executive function in the company.

even where he functions as in executive capacity... as longer as he maintains control, he/she cant be sacked. the owner of an organization can only be sacked if he loses control... ie owning less than 50%

ThierryJay:


If the owner does not function in an executive capacity for the company i.e as MD or CEO, the Board of directors cannot sack him/her.

ikenna44:
the minute u lose control of a company, u seize to be the owner. the key word is control... which u can only have if u own 50.1%. where all shareholders own less than 20%, 18% etc... then there's no clear owner... the board can play them against each other. \

it is near impossible to directly own more than 30% of any major company. I am talking about a Fortune 500 type of company.

People who want total control of their company usually can't grow beyond local champions.

Afromentalist:
I think you misunderstood my question.

I did not dispute any of your proposals, I actually quite agree with them. Second, I do not compare myself with anyone, certainly not Dangote.

I was simply asking if you have any clue as to which strategy he used to be able to grow that exponentially, without having to forfeit much of his equity.

Finally, I am well aware that Dangote is the grandson of a very wealthy man, but as far as his own empire is concerned it is usually claimed that he did not enjoy much funds from the family save a 500K loan from a relative. Hence the question.

With generational wealth that dates back to 80 years, he has enough capital.

He started his personal business in 1977, which is 44 years ago. He started inviting others to invest in his companies about 14 years ago.

Exponential growth came when he made his busineses a public company, he got a dividend of N200 billion from Dangote Cement in 2020.

Afromentalist:

it is near impossible to directly own more than 30% of any major company. I am talking about a Fortune 500 type of company.

People who want total control of their company usually can't grow beyond local champions.

Correct

phazotron:


65% of 100m and I go grow am over time

While you will be slowly growing, another company with less control preoccupations will saturate the market and turn it into a cash cow. Your growth which was already small, will even slow down all the more and you will be limited to local all mighty.

any idea how much 1% of zenith is worth?
you will need to compare the amount invested to the ROI first... dont just look at the returns, look at what was invested and the associated risks

emmanuelewumi:


Different strokes for different folks, I am okay with 1% Zenith Bank than with 100% of a microfinance bank.

Your 1% ownership of Zenith Bank would have fetched you a dividend of N900 million in 2020


While the microfinance bank might not make a profit of N100 million in 2020

you are derailing... lets focus on the question that this post originally sought to address

Afromentalist:

it is near impossible to directly own more than 30% of any major company. I am talking about a Fortune 500 type of company.

People who want total control of their company usually can't grow beyond local champions.

ikenna44:
you are derailing... lets focus on the question that this post originally sought to address

The question had been competently and completely answered long before you even posted. We are now discussing (yourself inclusive cf. your previous post before this one) derivate questions. You are free not to discuss them though, but don't act self righteous.

ikenna44:
any idea how much 1% of zenith is worth?
you will need to compare the amount invested to the ROI first... dont just look at the returns, look at what was invested and the associated risks

That is 330 million shares valued at N7.6 billion.

The investment paid a dividend of N220 million about 15 years ago, due to growth of the business dividend increased to N900 million in 2020

Afromentalist:

While you will be slowly growing, another company with less control preoccupations will saturate the market and turn it into a cash cow. Your growth which was already small, will even slow down all the more and you will be limited to local all mighty.

The problem with most African enterpreneurs. Imagine if Facebook had decided to grow slowly.

emmanuelewumi:


Once board of directors have made up their mind on removing a non executive director who does not have a controlling share, it is a forgone conclusion. What happen at the Annual General Meeting is just for formalities

That one is boardroom/shareholder politics and has transcended the scope of the OP's question even though valid. Officially, BODs alone don't have documented powers to remove a non-executive owner.

ikenna44:
the minute u lose control of a company, u seize to be the owner. the key word is control... which u can only have if u own 50.1%. where all shareholders own less than 20%, 18% etc... then there's no clear owner... the board can play them against each other. \

This is totally on point. I only wanted you to consider other possible scenarios that didn't fit in to your initial comment and you have addressed that now.

ThierryJay:


That one is boardroom/shareholder politics and has transcended the scope of the OP's question even though valid. Officially, BODs alone don't have documented powers to remove a non-executive owner.

They can if a member of the board has controlling shareholding. The decision will only be ratified or rubber stamped at the AGM

A member of a 10 man board, can be more powerful than the combination of the other 9 directors.

aktolly54:
do you watch POWER ? Lucious Lyon is an example

U mean empire

Let me also contribute to this matter.

For people saying 51%, it's rather 50%+ 1 share.

In a case of 200,000 share capital, 51% = 102,000 shares. However,100,001 shares (which is 50% + 1 share) is what is needed to be the majority.

sandra50:
Oh wow..is that why

Yes dear

Yes... Steve Jobs apple owner was once fired

It happened to late Steve Jobs of Apple

ThierryJay:


If the owner does not function in an executive capacity for the company i.e as MD or CEO, the Board of directors cannot sack him/her.

If a COMPANY has a Board of Directors, that Board has the ABSOLUTE right to FIRE THE PRINCIPAL OFFICERS including the OWNER! If the OWNER is not a principal officer, then the question is moot meaning the question that the author posed at the beginning is VOID!

Karleb:


Funny thing is, most founders are the most suitable for the job. When Steve job was sacked, they had to call him back because the company was declining.

Most investors don't know jack shiit about the company they're investing in. All they care about is profit. Most don't even know how to invest because they still hire people to do their investments.

The only thing they have is the power of money.

The wise man has spoken!!

emmanuelewumi:


The founder can be fired as the CEO of the company

Yeah ,but he still retain his stocks.
Just that most founders always loved to be in the executive of their company.

patorial:


Yeah ,but he still retain his stocks.
Just that most founders always loved to be in the executive of their company.

His stock is his personal property, CEO title is not a personal property

UnabashedIPOB:


To have a Board of Directors, a company MUST have shareholders or stockholders, hence a Private Limited company and NOT a Sole Proprietorship. So, if a company has Board of Directors, the person who started the company (technically the OWNER) can be fired by the Board of Directors. For your information, CEO is only a title, so the owner or who started the company can be come a CEO, President, VP, CFO or COO. But the question that was asked was whether a Board of directors can FIRE the OWNER and the answer still remains ABSOLUTELY YES!

The fact I was trying to start is that firing doesn't mean that the owner (in this case a founder) is losing his stocks in the company.

emmanuelewumi:



His stock is his personal property, CEO title is not a personal property

Most people think that the firing Op meant was losing ownership of the company

patorial:


The fact I was trying to start is that firing doesn't mean that the owner (in this case a founder) is losing his stocks in the company.

Well, FIRING is NOT synonymous with LOSING ones share in a company. The firing of the OWNER or any principal OFFICER by a Board of Directors does not mean that the fired individual would lose their shares in the company. So, if you need to stake your point, you need to be SPECIFIC and not just make a broad and encompassing statement.