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> it's stretch to imply that if it weren't for the CEO, every worker is going to get a $30k bonus. That was just an illustration of how far the money could go,
by lapcat 2y ago
> it's stretch to imply that if it weren't for the CEO, every worker is going to get a $30k bonus.
That was just an illustration of how far the money could go, as compared to the direct compensation of the CEO, which wouldn't go very far.
> Moreover, by your own admission, paying it out as a dividend is an option, so that's the reasonable counterfactual to compare against.
It's one option, but I'm not sure why you're ignoring the reinvestment option.
The whole issue is that stock buybacks provide no long-term benefit to the company. They're a short-term pump and dump. In a real, measurable sense, stock buybacks shrink the company, by reducing the number of outstanding shares.
> Buybacks are the same as dividends for all intents and purposes, except for some tax advantages.
That's not true at all. Dividends benefit all stockholders, whereas buybacks benefit only the stockholders who sell. The buybacks may temporarily bump the stock price, but again, that's of no immediate benefit to long-term investors who hold onto their stock.
- gruez 2y ago>That was just an illustration of how far the money could go, as compared to the direct compensation of the CEO, which wouldn't go very far. No, the direct compensation of the CEO is still only a hundred bucks or so. Claiming $30k per employee as the "direct compensation of the CEO" makes no sense for the reasons I explained in my prior comment. >The buybacks may temporarily bump the stock price, but again, that's of no immediate benefit to long-term investors who hold onto their stock. No, it provides a permanent bump to the price because there's less investors to split future profits amongst, which means each share gets more profits and is therefore worth more.
- lapcat 2y ago> No, the direct compensation of the CEO is still only a hundred bucks or so. That's what I said: "as compared to the direct compensation of the CEO, which wouldn't go very far." You appear to be confused. > No, it provides a permanent bump to the price A permanent bump LOL. There's no such thing in the stock market. If the company maximizes short-term results while screwing itself in the future, that so-called "permanent" bump isn't going to last.