This (and other forms of return) is the motivation for the investor to put up the initial capital.
Do you have an alternative proposal to handle the common case where someone who wants to work hard and innovate needs capital to do so?
External shareholders could still see a return. But I think the days of seeing massive returns on capital need to be over. It should be a fight just to beat inflation imho.
To be honest though I'm still thinking about this a lot and don't have an exact answer. So this idea is in flux. That doesn't mean it's not a problem though.
If fact, its generally considered a poor idea to own shares in the company you work for - if the company takes a downturn, not only do your shares lose value, you're probably also out of a job.
Meanwhile, the employees who work hard to contribute to GDP and grow the company see a fixed salary. They do not see those dividends for the rest of their lives, instead when they leave a company it's over. Why? Why don't employees build up dividend streams from the companies they helped build? Why do Amazon employees get paid minimum wage and are denied bathroom breaks when Bezos' net worth can swing $9B in a single day? Why aren't all employees, from Janitor to CEO receiving dividends from the success of the company?
It all seems ridiculous to me. We need to encourage people to work hard and innovate, not sit on piles of capital and assets.
I'm someone who invests heavily and takes advantage of the system. But I see the flaws and it really bothers me.