Which specific legislations force corporations to give shareholders priority?

It's called the "Fiduciary Duty".  The Board of Directors is obligated to act on behalf of shareholders and in their interest.  http://en.wikipedia.org/wiki/Fiduciary Corporations are created to allow groups of people to work together and for shareholders to share the economic burdens and interest.  Some other answers focussed on the priority of short-term vs. long-term revenues.  Public companies see their share price change with market expectations, so part of what they do is setting expectations.  They are not obligated to prioritize short-term vs. long-term shareholder value, but generally try to do what they can to raise their price, sometimes including "smoothing" their earnings and making short-term investments at the expense of long-term value.

I agree with that the premise of the question is incorrect, but for the following reason: It incorrectly implies that, pursuant to legislation, "Corporations prioritize short term profits for shareholders above all else, and can legitimately be sued if they don't fulfill this obligation." In the U.S., directors (who are responsible for managing the corporation) have a fiduciary duty that typically is defined (depending on the state) by statute and case law. They owe a duty of loyalty and a duty of care. These are discussed briefly in my post "Directors’ Fiduciary Obligations: Delaware vs. California": "[D]uty of loyalty: A director’s duties must be performed in good faith and in a manner believed to be in the best interest of the corporation and its shareholders." - http://danashultz.com/blog/2010/10/26/directors-fiduciary-obligations-delaware-vs-california To the best of my knowledge, there is no statute or case law that says short-term, or any other, profits must be directors' paramount concern. Directors are expected to use their judgment to determine what is in the shareholders' best interest.This answer is not a substitute for professional legal advice....