Big U.S. corporations shuffling their businesses around the world for tax advantages is nothing new or uncommon. With one of the chunkiest corporate tax rates in the Western world, the United States is a pricey place to call home. For a long-held U.S. company to up and leave completely, though, is a different story. Pharmacy giant Walgreen (NASDAQ:WBA) is under pressure to do just that, according to the Financial Times. The move, which is called a tax inversion, would shift more than 20% of shares to foreign owners and avoid U.S. domestic tax status. Management seems hesitant -- and for a good reason.

Not PC
To understate the obvious, moving the $61 billion pharmacy giant outside of the United States for little reason other than to avoid a tax bill would be a political no-no. For one thing, Walgreen earned nearly $2.5 billion in net income during its last reported fiscal year. Last quarter alone, it generated $1.1 billion in cash from operations from its 8,200 core stores. In two years, the stock is up roughly 100%.

There is no way to make the case that Walgreen is hurting.

Yet a group of shareholders representing roughly 5% of the company, including Goldman Sachs and various hedge funds, are reportedly "frustrated" that Walgreen management refused to even consider moving their domicile to Europe. The reason is simple: Earnings per share could increase 75% if the company switched up its tax base. According to a recent investor conference call, the company's U.S. business has an effective rate of 37.5%, while its stake in Alliance Boots (Europe's biggest pharmacy chain) is taxed at 20%.

Can this really be considered ignoring the best interests of shareholders? The backlash here in the U.S. from regulators, not to mention the public, would be tremendous. One of the most successful retailers around would avoid paying taxes while not losing one iota of influence or sales in its core U.S. market.

As investors grow their influence on public businesses and the rise of activist investing becomes a daily battle, the focus of many good companies could easily shift further away from their fundamental purpose. Walgreen has the wind at its back with great prospects in the back-of-store pharmacy and slow-but-steady sales in the front. Of all of the brick-and-mortar retailers out there, Walgreen and its peers are in the top echelon of businesses to own.

This is one instance where investor influence is pushing the company away from progress, and keeping management occupied with factors that will not aid the operating business in the long run.

Cheers to Walgreen CEO Greg Wasson for his "refusal" to consider moving the business overseas -- let's hope the resilience stands.