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Because they're taking the tax savings from the irresponsible congressional actions and using that to enrich the wealthy rather than raising the pay of their wo

Because they're taking the tax savings from the irresponsible congressional actions and using that to enrich the wealthy rather than raising the pay of their workers by a non-trivial amount.

tylerhou 8y ago
A large number of people who work at, say Apple, the company which bought the most of their stock back, will see very non-trivial increases in effective compensation because of stock price rises.
- ryandrake 8y ago
  Those increases are only non-trivial and meaningful to employees who have a non-trivial or meaningful amount of equity. In other words a very small percentage of employees.
  - tylerhou 8y ago
    Very small percentage? From a quick Google roughly 17-25% of Apple employees are engineers. Assuming all engineers get options, and that options are around 1/4 of an engineers compensation, and assuming that buybacks raised Apple's stock by 2% (I don't know how accurate that number is, but I'm just throwing it out there), each employee saw a 0.5% bonus per year assuming their options were issued before the buyback was decided. That's definitely non-negligible; it's around $1000/year for the average engineer. To be honest, I wouldn't be surprised if Apple also compensated some high-value non-engineers in stock. To find the actual number of people who benefit, you would have to include them, plus you would have to add in all the people who don't work at Apple but own Apple stock directly or indirectly (for example, while I don't work at Apple, I probably own some stock because of my participation in a mutual fund). I'm pretty certain that there are tens of thousands of people who see an increase in earnings because of Apple buybacks. The majority of them might be well-off since they are engineers or have the luxury of purchasing mutual funds, but I am hardly a millionaire or billionaire. EDIT: Did more Googling; Apple's stock jumped around 12% after announcing their buyback, so the bonus is around 3%. I would love a $6000 bonus/year for the next few years. [0] https://www.forbes.com/sites/chuckjones/2018/05/12/what-impact-could-apples-100-billion-stock-buyback-program-have-to-its-stock-price/#475d2b224c4c https://www.forbes.com/sites/chuckjones/2018/05/12/what-impa... [0]
    - ryandrake 8y ago
      Yes I guess it depends on your definition of non-trivial. $1000 is nice but it’s what, one or two weeks of rent? There are undoubtedly Apple (and other tech company) employees who watch their company’s stock price daily and receive a huge amount when it goes up 2% but not many of them.
      - tylerhou 8y ago
        I updated my comment with some actual numbers; it's probably around $6000/year that your previous option grant was active, with favorable tax treatment because it can be taxed as long term capital gains if you're smart (and if you work at Apple, you probably are).
    - jldugger 8y ago
      > Assuming all engineers get options, and that options are around 1/4 of an engineers compensation, and assuming that buybacks raised Apple's stock by 2% General consensus I've seen on Blind is that FANG engineers take in about half their wages in stocks, but that includes multiple years of RSU refreshers and appreciation. But there's another way to think about it: buyback money isn't that much different than a dividend where people self-sort into who wants the money now versus later. Apple approved a 100B buyback program in May, and 4,915,138,000 shares outstanding. 20 bucks a share. Most offers I've seen on blind are around $100k of shares, so for AAPL at today's market close price that'd be $9300 dollars returned. Probably a bit more given they're at an all time high and the announcement was a few months prior. So the 12 percent figure kinda makes sense: 10 percent or so of the shares announced to be retired via, and a 2 percent jump is explainable via typical earnings. I doubt you'd find an engineer paid in RSUs who wanted to end buyback programs, but maybe one will pop up on HN and enlighten us.
    - int_19h 8y ago
      Compared to the "bonus" that high-level execs and other big shareholders get, it's not even peanuts. The issue here isn't the absolute number, it's who benefits relative to whom.
      - 8y ago
h4b4n3r0 8y ago
But worker pay won’t go up unless there’s a shortage of workers. This is orthogonal to worker pay.
- toomuchtodo 8y ago
  Worker pay goes up with unionization and collective bargaining without needing a tight (usually temporary) labor market. Otherwise, we end up in a highly cyclical economic condition where employment conditions are tolerable during tight labor markets, but are downright terrible when there is a surplus of labor (note only recently, with unemployment near 3.9%, the lowest unemployment rate since 2000, that employers are considering usually undesirable candidates [criminal records, no college degree, etc]). Why is this undesirable? Simple. Lower and middle class workers drive the economy with their consumption. If they don't have stability, they don't spend. If they don't spend, the velocity of money through the economy decreases. You want workers to feel comfortable spending, and the only way to do that is by giving them stability along with a fair wage.
  - h4b4n3r0 8y ago
    Sure. I’m just saying worker pay issue is largely orthogonal to stock buybacks or tax cuts. It’s not like, all things being equal, the revenue would be spent on workers anyway.
    - toomuchtodo 8y ago
      > It’s not like, all things being equal, the revenue would be spent on workers anyway. It's possible it would be if it was more tax advantageous to pay workers then to pay out profits as buybacks through the most recent tax cuts. Clearly, taxes matter in corporate decision making, as large multinationals were keeping their cash offshore as long as possible, waiting for a tax holiday.
      - h4b4n3r0 8y ago
        Hence the “all things being equal” qualification.
hueving 8y ago
It is not the job of companies to give excess capital to their workers. Where did you get that idea from? The rate workers are paid depends on the market for their skills and what retention the company wants. Worker pay will increase as the economy heats up and causes the labor pool to tighten.
- RandomInteger4 8y ago
  I got that idea from being a decent human being that understands that workers will work more efficiently if they're not struggling in their personal lives; a struggle which can happen as a result of the market undervaluing humans with respect to the cost of living, and the workers lacking the bargaining power to demand what they need / deserve.
  - hndamien 8y ago
    Struggles can be pretty motivating, unfortunately.
    - lawnchair_larry 8y ago
      Only if they lead to progress. Treading water is demotivating.
    - felix_nagaand 8y ago
      For the 0.x% of people that breakout and exceed their demographics statistical expectations by orders of magnitude? Yeah, sure, that's true. What about for the rest of the population that doesn't? They're burnt out, disabled, addicted, ill, obese, unhappy, indebted, deluded, ignorant, and servile.
- rorykoehler 8y ago
  In that case the government needs to tax corporations at a level that allows them provide the necessary services to workers that workers can't afford on their shitty incomes (ie healthcare, education, transport & housing etc). This isn't happening. Governments are handing out cash to companies at the expense of society and then the companies are double dipping again.

Because they're taking the tax savings from the irresponsible congressional actions and using that to enrich the wealthy rather than raising the pay of their workers by a non-trivial amount.

tylerhou 8y ago

A large number of people who work at, say Apple, the company which bought the most of their stock back, will see very non-trivial increases in effective compensation because of stock price rises.

ryandrake 8y ago
Those increases are only non-trivial and meaningful to employees who have a non-trivial or meaningful amount of equity. In other words a very small percentage of employees.
- tylerhou 8y ago
  Very small percentage? From a quick Google roughly 17-25% of Apple employees are engineers. Assuming all engineers get options, and that options are around 1/4 of an engineers compensation, and assuming that buybacks raised Apple's stock by 2% (I don't know how accurate that number is, but I'm just throwing it out there), each employee saw a 0.5% bonus per year assuming their options were issued before the buyback was decided. That's definitely non-negligible; it's around $1000/year for the average engineer. To be honest, I wouldn't be surprised if Apple also compensated some high-value non-engineers in stock. To find the actual number of people who benefit, you would have to include them, plus you would have to add in all the people who don't work at Apple but own Apple stock directly or indirectly (for example, while I don't work at Apple, I probably own some stock because of my participation in a mutual fund). I'm pretty certain that there are tens of thousands of people who see an increase in earnings because of Apple buybacks. The majority of them might be well-off since they are engineers or have the luxury of purchasing mutual funds, but I am hardly a millionaire or billionaire. EDIT: Did more Googling; Apple's stock jumped around 12% after announcing their buyback, so the bonus is around 3%. I would love a $6000 bonus/year for the next few years. [0] https://www.forbes.com/sites/chuckjones/2018/05/12/what-impact-could-apples-100-billion-stock-buyback-program-have-to-its-stock-price/#475d2b224c4c https://www.forbes.com/sites/chuckjones/2018/05/12/what-impa... [0]
  - ryandrake 8y ago
    Yes I guess it depends on your definition of non-trivial. $1000 is nice but it’s what, one or two weeks of rent? There are undoubtedly Apple (and other tech company) employees who watch their company’s stock price daily and receive a huge amount when it goes up 2% but not many of them.
    - tylerhou 8y ago
      I updated my comment with some actual numbers; it's probably around $6000/year that your previous option grant was active, with favorable tax treatment because it can be taxed as long term capital gains if you're smart (and if you work at Apple, you probably are).
  - jldugger 8y ago
    > Assuming all engineers get options, and that options are around 1/4 of an engineers compensation, and assuming that buybacks raised Apple's stock by 2% General consensus I've seen on Blind is that FANG engineers take in about half their wages in stocks, but that includes multiple years of RSU refreshers and appreciation. But there's another way to think about it: buyback money isn't that much different than a dividend where people self-sort into who wants the money now versus later. Apple approved a 100B buyback program in May, and 4,915,138,000 shares outstanding. 20 bucks a share. Most offers I've seen on blind are around $100k of shares, so for AAPL at today's market close price that'd be $9300 dollars returned. Probably a bit more given they're at an all time high and the announcement was a few months prior. So the 12 percent figure kinda makes sense: 10 percent or so of the shares announced to be retired via, and a 2 percent jump is explainable via typical earnings. I doubt you'd find an engineer paid in RSUs who wanted to end buyback programs, but maybe one will pop up on HN and enlighten us.
  - int_19h 8y ago
    Compared to the "bonus" that high-level execs and other big shareholders get, it's not even peanuts. The issue here isn't the absolute number, it's who benefits relative to whom.
    - 8y ago

h4b4n3r0 8y ago

But worker pay won’t go up unless there’s a shortage of workers. This is orthogonal to worker pay.

toomuchtodo 8y ago
Worker pay goes up with unionization and collective bargaining without needing a tight (usually temporary) labor market. Otherwise, we end up in a highly cyclical economic condition where employment conditions are tolerable during tight labor markets, but are downright terrible when there is a surplus of labor (note only recently, with unemployment near 3.9%, the lowest unemployment rate since 2000, that employers are considering usually undesirable candidates [criminal records, no college degree, etc]). Why is this undesirable? Simple. Lower and middle class workers drive the economy with their consumption. If they don't have stability, they don't spend. If they don't spend, the velocity of money through the economy decreases. You want workers to feel comfortable spending, and the only way to do that is by giving them stability along with a fair wage.
- h4b4n3r0 8y ago
  Sure. I’m just saying worker pay issue is largely orthogonal to stock buybacks or tax cuts. It’s not like, all things being equal, the revenue would be spent on workers anyway.
  - toomuchtodo 8y ago
    > It’s not like, all things being equal, the revenue would be spent on workers anyway. It's possible it would be if it was more tax advantageous to pay workers then to pay out profits as buybacks through the most recent tax cuts. Clearly, taxes matter in corporate decision making, as large multinationals were keeping their cash offshore as long as possible, waiting for a tax holiday.
    - h4b4n3r0 8y ago
      Hence the “all things being equal” qualification.

hueving 8y ago

It is not the job of companies to give excess capital to their workers. Where did you get that idea from? The rate workers are paid depends on the market for their skills and what retention the company wants. Worker pay will increase as the economy heats up and causes the labor pool to tighten.

RandomInteger4 8y ago
I got that idea from being a decent human being that understands that workers will work more efficiently if they're not struggling in their personal lives; a struggle which can happen as a result of the market undervaluing humans with respect to the cost of living, and the workers lacking the bargaining power to demand what they need / deserve.
- hndamien 8y ago
  Struggles can be pretty motivating, unfortunately.
  - lawnchair_larry 8y ago
    Only if they lead to progress. Treading water is demotivating.
  - felix_nagaand 8y ago
    For the 0.x% of people that breakout and exceed their demographics statistical expectations by orders of magnitude? Yeah, sure, that's true. What about for the rest of the population that doesn't? They're burnt out, disabled, addicted, ill, obese, unhappy, indebted, deluded, ignorant, and servile.
rorykoehler 8y ago
In that case the government needs to tax corporations at a level that allows them provide the necessary services to workers that workers can't afford on their shitty incomes (ie healthcare, education, transport & housing etc). This isn't happening. Governments are handing out cash to companies at the expense of society and then the companies are double dipping again.