Seriously, a lot of CEOs and most managers could be much more easily replaced by AI than the workers. Run some analysis on some metrics lay off people based on that. Go over the market analytics, direct staff to work on derivative versions of the products that have good numbers, cancel products that don't. I'm not even sure if you really need AI for this, a very basic script could handle a lot of it.
Of course a program would be lacking in the common sense to say "Nobody is going to drop a week's pay so they can go into a virtual world where they're a poorly drawn legless cartoon character". But present day CEOs make these mistakes anyway. It wouldn't be good, but it wouldn't be worse than the status quo.
It makes sense if they're pulling out of the stock market entirely, in that case it's just settling the books. Any other reason is to manipulate the price. The whole stock market is a house of cards controlled directly by a few self-titled elites though, so chicanery is literally built in and always was.
I agree. I could live with it if it were merely a way to defer taxes, but the U.S. has something called the stepped-up basis. This allows people to inherit stocks without paying tax on the capital gains. The wealthy can live their whole lives without paying any tax. Both stock buy-backs and the stepped-up basis severely undermine the stock market and tax system.
It's very obviously is. Stock buybacks aren't allowed almost anywhere else in the world for a reason. It just leads to terrible behavior. This coupled with insanely low effective corporate tax rates means companies horde capital and do buybacks instead of doing other activities that are more economically beneficial to the country. Like increasing worker pay...
If I'm being honest, I don't understand this angle. Why are stock buybacks immoral or wrong? Isn't it simply using extra cash in a company to buy back stock from shareholders? With the same demand and reduced total stock, of course the price is going to go up. But the total market capitalization remains the same. I don't understand why this is somehow wrong. Can someone help me out?
Because executive pay is largely given in shares, so it incentivizes the leadership to invest funds in buy backs to inflate the price of the very shares they own instead of investing that money into employee pay or other company centric initiatives.
The other reply is correct regarding the macro effects of the practise. The more immediate issue is that it allows shareholders to avoid paying dividend taxes. So they can effectively defer paying taxes until they realise any capital gains. This is a huge benefit, as the present value of money is worth much more than the future value of money. However there is an even larger benefit in the U.S. Dependents can inherit stocks at the current price and avoid paying any capital gains tax. This is called the “stepped-up basis.” It’s an insane tax loophole. Together stock buy-backs and the stepped-up basis allow the ultra wealthy to pay little to no tax, ever. They take out perpetual loans to pay for living expenses, guaranteed against their holdings.
I agree. They need to do a reverse split if they want to change the shares in circulation.
The idea was a company could show faith by buying their own stock. Now ceo pay is tied to factors associated with the stock that can be manipulated by buying it back.
The IBM bro Ginny made millions while the company shrunk by manipulating the stock.
I don’t care what a ceo makes. I do care what they do. If they’re only focusing on themselves, I care.
A tale as old as mankind. Like 20 years ago I saw a movie. Some indie thing from France or Spain. The kind of shit that gets highly acclaimed at the Cannes film festival. In one scene there was a bricklayer reciting a poem (from the top of my head and loosely translated from German):
My grandfather was a bricklayer.
My father was a bricklayer.
I am a bricklayer, too.
But, tell me, where is my house?
It's blatant stock manipulation. The stock price goes up because they increase demand for the stock for no reason. The value of the company doesn't change at all other than they're holding stock as an asset instead of the cash. Yet the stock is worth more now. It's stock manipulation, plain and simple.
But…but it’s politics! Surely politics must always be 50/50 divisive, and not be based around universal assmunchers that any sane person should agree is an asshole?
They could've paid for all of the UAW's asks and then some with just that but it's less about the money and more about trying to look strong. The reality is they are nothing without their workers, no company is.
Just like how the losses the entertainment industry has suffered due to the writers and actors strike could have paid for their demands 10 times over. This is 100% about stripping the power from workers and keeping the power in the C suite.
If stock buybacks are Capital's path of least resistance it will self organize, like iron shavings to a neodymium magnet, and make it happen. There is no human agency in the circuits of capitalism and never will be.
If this woman tried to not do stock buybacks, she would be fired by her peers/board and replaced.
If this woman was even capable of considering doing pay raises instead of stock buybacks, she would have been clocked and removed from the circuit like an intelligent species crashing into the fermi paradox/great filter.