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Their share price growth is only a result of share buy backs. They’ve fired tens of thousands of employees and used the cost savings to buy their own stock back
by bluedevil2k 2y ago
Their share price growth is only a result of share buy backs. They’ve fired tens of thousands of employees and used the cost savings to buy their own stock back, enriching executives, especially their CEO, whose pay increased 23% from 2022 to 2023 to $20.4M. (And IBM didn’t even meet their own internal revenue goal). Are the execs doing what’s best for the company’s long term prospects or what’s best for the shorter term shareholders holder?
* https://ycharts.com/companies/IBM/stock_buyback https://ycharts.com/companies/IBM/stock_buyback
* https://www.theregister.com/AMP/2024/03/15/ibm_ceo_pay_jumps_23/ https://www.theregister.com/AMP/2024/03/15/ibm_ceo_pay_jumps...
- lotsofpulp 2y agoShare buybacks enrich all shareholders, it just happens that executives get paid in stock and/or are awarded compensation triggered by meeting certain stock prices. This is all for the benefit of shareholders.
- bluedevil2k 2y agoDividends enrich all shareholders as well and at a lower tax rate (15% vs 20%). So why do share buy backs? Because that increases share price and helps execs hit stock price targets which trigger more options, while dividends decrease share price.
- lotsofpulp 2y agoAs a shareholder, I usually do not want dividends. If a share buyback increases the stock price, then I don’t have to pay any tax. If a dividend is given to me, then I have to pay tax…but why would I want to pay tax now if I am just going to buy more shares with the post tax dividend money? Also, federal US capital gains tax rate is 20% only for those earning $518k+ per year if single and $583k+ of married filing joint. Otherwise, capital gains tax rate is the same 15% as qualified dividends.