5 ms·
It seems to me that buybacks reward those who've held the stock so far but want to exit their position, and managers who want a bigger bonus short-term. In con
by youeseh 5y ago
It seems to me that buybacks reward those who've held the stock so far but want to exit their position, and managers who want a bigger bonus short-term.
In contrast, dividends reward investors who want to remain invested, but I don't know what incentive management would have unless they too are shareholders.
- toast0 5y agoIf I receive a dividend and don't use it to buy more shares, now I'm less invested in that stock. And I've got to pay tax. If the company buys other people's shares, now I own (very marginally) more of the company. I agree with your management incentives, although RSUs and options contracts can adjust for dividends.