They are nothing but direct stock manipulation that was 'legalized' at the same time where executive compensation was moved from salary to... stock, so that you end up with a quasi-legal (stock manipulation by executives is supposed to be illegal) corrupt incentives system.
-Stock buybacks are not manipulation, they’re simply a way to return cash to shareholders and then the shareholder decides when to incur tax liability. A company is well within its rights to issue additional shares or buy back and destroy shares at their discretion. It’s functionally equivalent to a dividend without a taxable event.
-Corporate boards award stock grants to executives because they want management to be aligned with shareholders. I think executive compensation is excessive, but stock grants do align management and shareholders.
Dilution is immoral and unfair to investors. If a company wants to raise money they should have to sell shares they own, not print more and sell those.
'Stock manipulation is cool, especially when you change executives pay structure to be based purely on said manipulation. Totally creates healthy incentives not perverse ones.'
Sorry, buy backs are not stock manipulation. Let's step back from emotions and political skew. A company is able to take their capital and deploy it how they see fit. This can include purchasing percentage ownership of their company back from stockholders. Whether or not you agree doesn't make it manipulation in the general sense. It's just a way for a company to use their money.
Couple articles that explore that:
https://hbr.org/2020/01/why-stock-buybacks-are-dangerous-for...
https://www.theatlantic.com/ideas/archive/2018/07/are-stock-...
They are nothing but direct stock manipulation that was 'legalized' at the same time where executive compensation was moved from salary to... stock, so that you end up with a quasi-legal (stock manipulation by executives is supposed to be illegal) corrupt incentives system.
Two things:
-Stock buybacks are not manipulation, they’re simply a way to return cash to shareholders and then the shareholder decides when to incur tax liability. A company is well within its rights to issue additional shares or buy back and destroy shares at their discretion. It’s functionally equivalent to a dividend without a taxable event.
-Corporate boards award stock grants to executives because they want management to be aligned with shareholders. I think executive compensation is excessive, but stock grants do align management and shareholders.
Dilution is immoral and unfair to investors. If a company wants to raise money they should have to sell shares they own, not print more and sell those.
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Nothing directly, it just sounds bad at face value.
'Stock manipulation is cool, especially when you change executives pay structure to be based purely on said manipulation. Totally creates healthy incentives not perverse ones.'
Sorry, buy backs are not stock manipulation. Let's step back from emotions and political skew. A company is able to take their capital and deploy it how they see fit. This can include purchasing percentage ownership of their company back from stockholders. Whether or not you agree doesn't make it manipulation in the general sense. It's just a way for a company to use their money.
It’s a way to return money to share holders.