Defeat for the company or defeat for shareholders? These things are not the same.
1. It signals employees still care about the company enough to not just quit and go elsewhere. And employees who care make a better product.
2. Negotiating better benefits generally helps retain the solid "middle class" who make the brunt of the work in a company. It might not entice the "rock-stars" or so, but they generally are not dis-incentivised by their colleagues getting better benefits either.
3. The C-suite gets to know they are not untouchable, this also helps keep them level when answering to the board of directors.