The most succinct way I've found to explain this to normal humes is this: When you buy stock, to make money, one of two things must happen: * The company pays

The most succinct way I've found to explain this to normal humes is this: When you buy stock, to make money, one of two things must happen: * The company pays a dividend regularly * The company's share price increases, then you sell A dividend is just like a salary. A buyback is just like a bonus. Everyone understands salaries and bonuses, there's no reason to lose your mind over thinking buybacks are nefarious unless you thinking giving employees a bonus is nefarious. Then, there are two key plusses to buybacks: * You choose the year in which you sell. This has favorable tax advantages, just like if you could choose the year in which you book a bonus. * Investors punish companies, sometimes heavily, when they decrease dividends. If you cannot guarantee a dividend indefinitely, you probably shouldn't give it out. Instead you should do a buyback. "Things are good right now, so here's a bonus." This is identical to how people think about salaries, so it should come as no surprise. Lowering a dividend later is like giving someone a pay cut, but people don't balk so much if you tell them you're giving them a one time bonus.