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The positive ROI may accrue primarily to the top executives who are in a position to directly make that decision. Especially in a field like semiconductor proce
by yborg 3y ago
The positive ROI may accrue primarily to the top executives who are in a position to directly make that decision. Especially in a field like semiconductor processing where risks are high on new investment, it is almost always a lower risk decision to buyback the stock. I don't know the specifics of Otellini's pay package, but I would assume that his tenure resulted in massive wealth for himself, so this is certainly rational economic behavior but severely damaged the company.
- nabla9 3y ago>it is almost always a lower risk decision to buyback the stock. This is all about buyback versus dividend. How it is that people are thinking wrong counterfactual?
- mamonster 3y agoWell the other part is that a big part of share buybacks are simply "sanitizing" the dilution from stock based comps(which are increasingly the way that most people get paid). Intel SBC was 3.2 billion in 2023, and there haven't been any buybacks I think the last 2-3 years? Quite a bit of dilution which doesn't really make long term investors happy.