“Record levels of share buybacks are attracting complaints from a growing number of prominent investors concerned that the practice is boosting executive bonuses but providing only limited benefits to shareholders.
“The world’s 1,200 biggest public companies collectively bought back a record $1.3tn of their own shares last year, triple the level of a decade ago and almost as much as they paid out to shareholders in dividends . . .
“‘We would prefer buybacks to be less prevalent,’ said Euan Munro, chief executive of Newton Investment Management.
“‘Used badly, [buybacks] can be used to manipulate [earnings per share] numbers upwards to meet medium-term management incentive targets at the expense of investments that might be important to a company’s long- term health,’ he said.” [Emphasis added.]
Egad! Share buybacks “can be used to manipulate earnings per share upwards”! We can’t have that, can we?
Investors are griping about . . . share buybacks?
By Thomas K. Brown,
BAD TAKE WATCH: Um, what?
“RECORD BUYBACK SPREE ATTRACTS
SHAREHOLDER COMPLAINTS
“Record levels of share buybacks are attracting complaints from a growing number of prominent investors concerned that the practice is boosting executive bonuses but providing only limited benefits to shareholders.
“The world’s 1,200 biggest public companies collectively bought back a record $1.3tn of their own shares last year, triple the level of a decade ago and almost as much as they paid out to shareholders in dividends . . .
“‘We would prefer buybacks to be less prevalent,’ said Euan Munro, chief executive of Newton Investment Management.
“‘Used badly, [buybacks] can be used to manipulate [earnings per share] numbers upwards to meet medium-term management incentive targets at the expense of investments that might be important to a company’s long- term health,’ he said.” [Emphasis added.]
Egad! Share buybacks “can be used to manipulate earnings per share upwards”! We can’t have that, can we?