Should stock BuyBacks be legal or illegal?
- Thread starter ZZman
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Originally Posted by Donald
The Trump tax law of last year reduced the corp tax level and the extra money the companies had was used in most cases to do stock buybacks not to create more jobs as had been promised. A few companies gave some small one time bonuses to employees, tossing them a bone. The cost of the tax bill was mainly financed by increased federal government debt. They did not reduce spending to be able to reduce corp taxes. They just reduced taxes on corp and the spending stayed the same, so the tax bill was financed by adding to the deficit. Crazy. The deficit is now $22 trillion total. But last year it was $2 trillion. Conservatives use to worry about the deficit but seem to be ignoring it now.
Exactly. The fantasy of giving employees more and capital spending was a joke. Most went to boost stock prices. They also didn't bring most of the money back from offshore. Why not just make that illegal period! I wonder how many bonuses will employees get from companies this year?
The Trump tax law of last year reduced the corp tax level and the extra money the companies had was used in most cases to do stock buybacks not to create more jobs as had been promised. A few companies gave some small one time bonuses to employees, tossing them a bone. The cost of the tax bill was mainly financed by increased federal government debt. They did not reduce spending to be able to reduce corp taxes. They just reduced taxes on corp and the spending stayed the same, so the tax bill was financed by adding to the deficit. Crazy. The deficit is now $22 trillion total. But last year it was $2 trillion. Conservatives use to worry about the deficit but seem to be ignoring it now.
Exactly. The fantasy of giving employees more and capital spending was a joke. Most went to boost stock prices. They also didn't bring most of the money back from offshore. Why not just make that illegal period! I wonder how many bonuses will employees get from companies this year?
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Originally Posted by ZZman
Originally Posted by Donald
The Trump tax law of last year reduced the corp tax level and the extra money the companies had was used in most cases to do stock buybacks not to create more jobs as had been promised. A few companies gave some small one time bonuses to employees, tossing them a bone. The cost of the tax bill was mainly financed by increased federal government debt. They did not reduce spending to be able to reduce corp taxes. They just reduced taxes on corp and the spending stayed the same, so the tax bill was financed by adding to the deficit. Crazy. The deficit is now $22 trillion total. But last year it was $2 trillion. Conservatives use to worry about the deficit but seem to be ignoring it now.
Exactly. The fantasy of giving employees more and capital spending was a joke. Most went to boost stock prices. They also didn't bring most of the money back from offshore. Why not just make that illegal period! I wonder how many bonuses will employees get from companies this year?
So you're going to have the government tell corporations how they should use their capital? That would include telling Boeing what airplanes to build, Apple what products to make, etc. Yup, the government has a great track record at directing capital to productive sources: Solydra is one good example, high speed rail in California another. And the post office sure works well. Oh yeah, and the government has sure managed the heck out of the F-35 program.
I agree companies could have done more to meet the hopes of what tax reform could have done. But again, there are tons of uncertainties out there right now, including trade with China, tariffs, etc. making any decision about how to use capital really difficult. Under the circumstances, stock buybacks look pretty safe and effective.
Originally Posted by ZZman
Originally Posted by Donald
The Trump tax law of last year reduced the corp tax level and the extra money the companies had was used in most cases to do stock buybacks not to create more jobs as had been promised. A few companies gave some small one time bonuses to employees, tossing them a bone. The cost of the tax bill was mainly financed by increased federal government debt. They did not reduce spending to be able to reduce corp taxes. They just reduced taxes on corp and the spending stayed the same, so the tax bill was financed by adding to the deficit. Crazy. The deficit is now $22 trillion total. But last year it was $2 trillion. Conservatives use to worry about the deficit but seem to be ignoring it now.
Exactly. The fantasy of giving employees more and capital spending was a joke. Most went to boost stock prices. They also didn't bring most of the money back from offshore. Why not just make that illegal period! I wonder how many bonuses will employees get from companies this year?
So you're going to have the government tell corporations how they should use their capital? That would include telling Boeing what airplanes to build, Apple what products to make, etc. Yup, the government has a great track record at directing capital to productive sources: Solydra is one good example, high speed rail in California another. And the post office sure works well. Oh yeah, and the government has sure managed the heck out of the F-35 program.
I agree companies could have done more to meet the hopes of what tax reform could have done. But again, there are tons of uncertainties out there right now, including trade with China, tariffs, etc. making any decision about how to use capital really difficult. Under the circumstances, stock buybacks look pretty safe and effective.
Originally Posted by ZZman
Originally Posted by wings&wheels
The CEO's and exec's are actually working...trust me on that..
Buybacks are one of the tools used to preserve and maintain shareholder value. They do directly benefit employees who are shareholders or have company shares in their retirement plans.
Buybacks can also benefit long term employee compensation. Buybacks are more common in hi-tech and other emerging businesses as they tend to grant RSU's or options to attract, reward and retain talent. This practice eventually leads toward dilution (increasing the total number outstanding shares), potentially decreasing individual share value which can be managed through buybacks. In this way the buybacks, through preserving the values of stock based comp granted to key employees also provide a direct benefit to them.
The average employee owns very little in stocks. Guess who does?
What industry?
I started in banking and moved to hi tech manufacturing, both of which provided equity down through the entire organization via ESPP's, options and through retirement plans. Obviously management and key employees received more, as well they should; the company had a strong interest in retaining them and the folks making the decisions and leading the company should do well when the company does well and less well when it does not. I've thrown options at kids I was recruiting straight out of college, but they were the stars. I also remember during the tech boom when a few of our long term facilities staff, janitors and an interplant shuttle driver, retired as millionaires...right place/right time and I was thrilled for them.
The answer is look for the jobs or seek the positions that provide what you want for comp and benefits...
Originally Posted by wings&wheels
The CEO's and exec's are actually working...trust me on that..
Buybacks are one of the tools used to preserve and maintain shareholder value. They do directly benefit employees who are shareholders or have company shares in their retirement plans.
Buybacks can also benefit long term employee compensation. Buybacks are more common in hi-tech and other emerging businesses as they tend to grant RSU's or options to attract, reward and retain talent. This practice eventually leads toward dilution (increasing the total number outstanding shares), potentially decreasing individual share value which can be managed through buybacks. In this way the buybacks, through preserving the values of stock based comp granted to key employees also provide a direct benefit to them.
The average employee owns very little in stocks. Guess who does?
What industry?
I started in banking and moved to hi tech manufacturing, both of which provided equity down through the entire organization via ESPP's, options and through retirement plans. Obviously management and key employees received more, as well they should; the company had a strong interest in retaining them and the folks making the decisions and leading the company should do well when the company does well and less well when it does not. I've thrown options at kids I was recruiting straight out of college, but they were the stars. I also remember during the tech boom when a few of our long term facilities staff, janitors and an interplant shuttle driver, retired as millionaires...right place/right time and I was thrilled for them.
The answer is look for the jobs or seek the positions that provide what you want for comp and benefits...
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The already wealthy manipulate the system because they own it, so to speak. The tax cut just helped the people who need it the least, which is typical anymore in this country. Buybacks boost stock prices short term then they can dump it at a higher price, making a few VIPs insanely wealthier than they are already.
Sam_Julier
$50 Site Donor 2024
Originally Posted by Silverado12
The already wealthy manipulate the system because they own it, so to speak. The tax cut just helped the people who need it the least, which is typical anymore in this country. Buybacks boost stock prices short term then they can dump it at a higher price, making a few VIPs insanely wealthier than they are already.
A VIP cannot sell shares that have been repurchased by a corporation for his or her personal gain. The reason is simple: the corporation owns the shares, not the VIP.
Sam
The already wealthy manipulate the system because they own it, so to speak. The tax cut just helped the people who need it the least, which is typical anymore in this country. Buybacks boost stock prices short term then they can dump it at a higher price, making a few VIPs insanely wealthier than they are already.
A VIP cannot sell shares that have been repurchased by a corporation for his or her personal gain. The reason is simple: the corporation owns the shares, not the VIP.
Sam
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The purpose of capitalism is to let the owner's decide how to best run their businesses. Borrow more money, pay back loans, bring in new investors, buy out current investors expand with more employees or contract with fewer employees.
The purpose of capitalism is not to force owner's to provide guaranteed jobs for an ever increasing number of employees. That is a whole other system.
The purpose of capitalism is not to force owner's to provide guaranteed jobs for an ever increasing number of employees. That is a whole other system.
Originally Posted by Sam_Julier
Originally Posted by Silverado12
The already wealthy manipulate the system because they own it, so to speak. The tax cut just helped the people who need it the least, which is typical anymore in this country. Buybacks boost stock prices short term then they can dump it at a higher price, making a few VIPs insanely wealthier than they are already.
A VIP cannot sell shares that have been repurchased by a corporation for his or her personal gain. The reason is simple: the corporation owns the shares, not the VIP.
Sam
There are also strict rules on when execs and certain other employees who have access to non-public information can trade stocks including 'windows', periods of time when most of their trading is prohibited.
Originally Posted by Silverado12
The already wealthy manipulate the system because they own it, so to speak. The tax cut just helped the people who need it the least, which is typical anymore in this country. Buybacks boost stock prices short term then they can dump it at a higher price, making a few VIPs insanely wealthier than they are already.
A VIP cannot sell shares that have been repurchased by a corporation for his or her personal gain. The reason is simple: the corporation owns the shares, not the VIP.
Sam
There are also strict rules on when execs and certain other employees who have access to non-public information can trade stocks including 'windows', periods of time when most of their trading is prohibited.
Originally Posted by SeaJay
The purpose of capitalism is to let the owner's decide how to best run their businesses. Borrow more money, pay back loans, bring in new investors, buy out current investors expand with more employees or contract with fewer employees.
The purpose of capitalism is not to force owner's to provide guaranteed jobs for an ever increasing number of employees. That is a whole other system.
Yep.
+ 100000000 %
The purpose of capitalism is to let the owner's decide how to best run their businesses. Borrow more money, pay back loans, bring in new investors, buy out current investors expand with more employees or contract with fewer employees.
The purpose of capitalism is not to force owner's to provide guaranteed jobs for an ever increasing number of employees. That is a whole other system.
Yep.
+ 100000000 %
Originally Posted by SeaJay
The purpose of capitalism is to let the owner's decide how to best run their businesses. Borrow more money, pay back loans, bring in new investors, buy out current investors expand with more employees or contract with fewer employees.
The purpose of capitalism is not to force owner's to provide guaranteed jobs for an ever increasing number of employees. That is a whole other system.
Who said guaranteed jobs? How about rewarding the current employees doing the work everyday and not just investors. That is capitalism working for everyone.
The purpose of capitalism is to let the owner's decide how to best run their businesses. Borrow more money, pay back loans, bring in new investors, buy out current investors expand with more employees or contract with fewer employees.
The purpose of capitalism is not to force owner's to provide guaranteed jobs for an ever increasing number of employees. That is a whole other system.
Who said guaranteed jobs? How about rewarding the current employees doing the work everyday and not just investors. That is capitalism working for everyone.
The more regulations a country puts on business, the more chance they will shutdown and relocate to another country.
Not Rocket Science
Not Rocket Science
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I guess greed and using people when possible are human nature. Why change it for the betterment of society as a whole. Maybe we can soon be back to the serf/ Kings /baron days.
Too bad we fought this fight long ago with unions but we often forget the sacrifices made and gains won and that which is given can and is taken away.
Too bad we fought this fight long ago with unions but we often forget the sacrifices made and gains won and that which is given can and is taken away.
Some unions are good.... some unions are terrible.
If a person in the USA is not happy with their job, they are free to quit and find another job.
Better yet.... start their own company and have Zero stock buy backs.
If a person in the USA is not happy with their job, they are free to quit and find another job.
Better yet.... start their own company and have Zero stock buy backs.
Originally Posted by ZZman
Originally Posted by philipp10
pass a law....unintended consequences. Waste of time to enforce also. Let free markets be free.
There is no such thing as a free market. They have to be regulated to try and curb abuse.
That is why we have a legal system to curb abuse...system would be self correcting if it didnt have interest groups and Government polluting it.
Originally Posted by philipp10
pass a law....unintended consequences. Waste of time to enforce also. Let free markets be free.
There is no such thing as a free market. They have to be regulated to try and curb abuse.
That is why we have a legal system to curb abuse...system would be self correcting if it didnt have interest groups and Government polluting it.
Originally Posted by ET16
Issuing stock is just another way of a company borrowing money. When they buy it back, they have less debt.
Equity is not debt, that's business 101
Issuing stock is just another way of a company borrowing money. When they buy it back, they have less debt.
Equity is not debt, that's business 101
Originally Posted by wings&wheels
Originally Posted by Sam_Julier
Originally Posted by Silverado12
The already wealthy manipulate the system because they own it, so to speak. The tax cut just helped the people who need it the least, which is typical anymore in this country. Buybacks boost stock prices short term then they can dump it at a higher price, making a few VIPs insanely wealthier than they are already.
A VIP cannot sell shares that have been repurchased by a corporation for his or her personal gain. The reason is simple: the corporation owns the shares, not the VIP.
Sam
There are also strict rules on when execs and certain other employees who have access to non-public information can trade stocks including 'windows', periods of time when most of their trading is prohibited.
I buy my employer's stock through a stock purchase plan at a discount. I am just a tech guy and even I have blackout periods of about 30 days before earnings announcement to 2 days after.
Originally Posted by Sam_Julier
Originally Posted by Silverado12
The already wealthy manipulate the system because they own it, so to speak. The tax cut just helped the people who need it the least, which is typical anymore in this country. Buybacks boost stock prices short term then they can dump it at a higher price, making a few VIPs insanely wealthier than they are already.
A VIP cannot sell shares that have been repurchased by a corporation for his or her personal gain. The reason is simple: the corporation owns the shares, not the VIP.
Sam
There are also strict rules on when execs and certain other employees who have access to non-public information can trade stocks including 'windows', periods of time when most of their trading is prohibited.
I buy my employer's stock through a stock purchase plan at a discount. I am just a tech guy and even I have blackout periods of about 30 days before earnings announcement to 2 days after.
With the rate of stock granted to employees and then sold by them, buybacks barely keep the holding level at an even level. How will a company continually grant stock to employees if they can not buy it back on the open market? How will they protect investors holdings' and capitalize on mispricing from the market if they can not bolster the share price with buybacks? I can't see a reality where the pros outweigh the cons.
Originally Posted by SeaJay
The purpose of capitalism is not to force owner's to provide guaranteed jobs for an ever increasing number of employees. That is a whole other system.
Yes but when business and government collude with tax breaks and regulation loopholes to set up headquarters in a friendly venue "because of all the jobs", the deal had better guarantee jobs or have a claw-back provision. And since government represents the people, how that deal continues to work for years afterwards is everybody's business.
Look at Amazon's milking the system for HQ2.
I still remember when we gave Ma Bell hardened bunkers for their "long lines" telephone microwave network. It was in the interest of civil defense to have reliable working phones. Cool! But now they've spun the former microwave towers off to their for-profit, reliability-not-guaranteed cell phone divisions and are doing stuff like overcharging California forest fire fighters.
The purpose of capitalism is not to force owner's to provide guaranteed jobs for an ever increasing number of employees. That is a whole other system.
Yes but when business and government collude with tax breaks and regulation loopholes to set up headquarters in a friendly venue "because of all the jobs", the deal had better guarantee jobs or have a claw-back provision. And since government represents the people, how that deal continues to work for years afterwards is everybody's business.
Look at Amazon's milking the system for HQ2.
Originally Posted by ZZman
I would rather see them illegal and have the companies put the money into the business or the employees.
I believe we live in a free country and people/companies should be able to do whatever they want with their money. If not, they can always move to China (live in a corporate commune) or Venezuela (didnt work out to well for them either) and be told what to do.
A public company responsibility in this case you mention, is to its SHAREHOLDERS, you know, the people who invest in the company.
The fiduciary responsibility is to the shareholder to create as much value in the company as the company can to increase the share price NOT put money into the employees, by buying back its own stock it creates more value in the remaining shares, the company job is to pay employees as little as possible and get as much profit out of their product as possible.
If the company fails to do that, they actually can and DO get sued by the shareholders which is why people buy the company stock in the first place.
It ALWAYS amazes me how some people think people and companies should be forced by laws and government officials (no less), to spend and use people own earned money. Good god ... wake up.
I would rather see them illegal and have the companies put the money into the business or the employees.
I believe we live in a free country and people/companies should be able to do whatever they want with their money. If not, they can always move to China (live in a corporate commune) or Venezuela (didnt work out to well for them either) and be told what to do.
A public company responsibility in this case you mention, is to its SHAREHOLDERS, you know, the people who invest in the company.
The fiduciary responsibility is to the shareholder to create as much value in the company as the company can to increase the share price NOT put money into the employees, by buying back its own stock it creates more value in the remaining shares, the company job is to pay employees as little as possible and get as much profit out of their product as possible.
If the company fails to do that, they actually can and DO get sued by the shareholders which is why people buy the company stock in the first place.
It ALWAYS amazes me how some people think people and companies should be forced by laws and government officials (no less), to spend and use people own earned money. Good god ... wake up.
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Sam_Julier
$50 Site Donor 2024
Originally Posted by ET16
Issuing stock is just another way of a company borrowing money. When they buy it back, they have less debt.
Really? You need to inform yourself on the difference between a bond and equity.
Sam
Issuing stock is just another way of a company borrowing money. When they buy it back, they have less debt.
Really? You need to inform yourself on the difference between a bond and equity.
Sam
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