When maximizing shareholders' wealth is not the only choice

This article presents an empirical analysis of the financial behavior of Sl ovenian firms. It focuses on the goal of the firm, capital budgeting, capit al structure, and dividend-payout decisions. Three theories of financial be havior, neoclassical, post-Keynesian, and employee governance, with three d ifferent goals of the firm, maximization of share value, maximization of lo ngterm probability of survival, and maximization of wages, provide the theo retical background. A sample of fifty-one important Slovenian firms is anal yzed using the data from a questionnaire for chief financial' officers and from financial statements. Two additional samples of listed and privatized firms are analyzed through financial statements only. We conclude that the average investigated Slovenian firm is still governed by employees, as it w as before privatization, its primary goal is maximization of wages, it does not have net capital investment, it is financed predominantly by equity, a nd it pays very low dividends.