However, stock repurchases are preferred by executives because they're either awarded stock options or have compensation tied to the stock price, as the author

However, stock repurchases are preferred by executives because they're either awarded stock options or have compensation tied to the stock price, as the author mentioned in an earlier piece (linked there): https://hbr.org/2014/09/profits-without-prosperity https://hbr.org/2014/09/profits-without-prosperity "Consider the 449 companies in the S&P 500 index that were publicly listed from 2003 through 2012. During that period those companies used 54% of their earnings—a total of $2.4 trillion—to buy back their own stock, almost all through purchases on the open market. Dividends absorbed an additional 37% of their earnings. That left very little for investments in productive capabilities or higher incomes for employees." "Stock-based instruments make up the majority of their pay, and in the short term buybacks drive up stock prices. In 2012 the 500 highest-paid executives named in proxy statements of U.S. public companies received, on average, $30.3 million each; 42% of their compensation came from stock options and 41% from stock awards. By increasing the demand for a company’s shares, open-market buybacks automatically lift its stock price" http://www.nber.org/digest/nov98/w6467.html http://www.nber.org/digest/nov98/w6467.html "Jolls finds that the average executive in her sample of firms with repurchase activity enjoyed a $345,000 increase in stock option value as a result of the repurchase activity. " http://www.wsj.com/articles/buybacks-can-juice-per-share-profit-executive-pay-1414453356 http://www.wsj.com/articles/buybacks-can-juice-per-share-pro...