Traditionally dividends and company profits were linked. An increase in dividends wouldn't occur, unless profits increased.
A recent examination of Statistics Canada data by the Canadian Centre for Policy Alternatives shows this has changed. Data from Statistics Canada showed that when the recession hit in 2008, dividends skyrocketed while operating profits dropped.
In the short term this helps share prices, but in the long term it can leave the company weaker. A recent Globe and Mail article expressed concern that Apple's moves to appease a hedge fund may harm its ability to innovate.
Financialization, when the financial sector grows to the point where it harms other sectors of the economy, is increasingly being viewed as a serious problem. In June, a former member of both the Ronald Reagan and George Bush Senior administrations blamed financialization for the slow pace of growth in the United States.