S&P500 - Disclose whether they exclude the impact of of buybacks?

nitro · Dec 12, 2015

People talk about hedge fund managers this and hedge fund managers that. What about the HUNDREDS of CEOs that commit far worse crimes?

Special report: Buybacks enrich the bosses even when business sags

"...Fewer than 20 of the S&P 500 companies disclose in their proxies whether they exclude the impact of buybacks on per-share metrics that determine executive pay..."

http://www.msn.com/en-us/money/insi...even-when-business-sags/ar-AAgfP93?li=BBnb7Kv

nitro · Dec 12, 2015

The Bern just talks about the big banks. What about endless buybacks?

der_kommissar · Dec 13, 2015

and what about 7 years of ZIRP? Why exclude that while you're at it?

Tsing Tao · Dec 14, 2015

I agree that buybacks should be excluded from C-level payouts. It's a conflict of interest if ever there was one.

prc117f · Jan 3, 2016

It is all a fraud but dont hate the player hate the game. Just worry about getting your beat wet in all the action.

eurusdzn · Jan 3, 2016

der_kommissar said:
and what about 7 years of ZIRP? Why exclude that while you're at it?

Remember, your message must compete with "Finding Bigfoot" re-runs.

piezoe · Jan 4, 2016

der_kommissar said:
and what about 7 years of ZIRP? Why exclude that while you're at it?

Are you suggesting that the low interest rates provided an incentive for buybacks using borrowed money?

If you own stock, or are considering buying stock, in a company that has announced a buyback, your due diligence requires that you ascertain the source of the funds to be used for the buyback. If it is borrowed money, that is a giant red flag in most cases. You'd also want to know how executive compensation is tied to share price and what the impact will be.

Tsing Tao · Jan 4, 2016

piezoe said:
Are you suggesting that the low interest rates provided an incentive for buybacks using borrowed money?

If you own stock, or are considering buying stock, in a company that has announced a buyback, your due diligence requires that you ascertain the source of the funds to be used for the buyback. If it is borrowed money, that is a giant red flag in most cases. You'd also want to know how executive compensation is tied to share price and what the impact will be.

Of course it has. A number of very intelligent heavy weights in the investment community have come out and talked about the reckless encouragement to take on extra risk that ZIRP is responsible for. Yeah, yeah, no one holds a gun to the head of the investors into these companies. But when you starve them of yield elsewhere and mis-price risk so readily, it's the same thing.

Borrowed money was used in the past to finance a competitor purchase, or invest in infrastructure, or expand operations, etc. Now it's being used to fund stock buybacks and drive up the price of the stock for short term gains - never caring about the long term sustainability of such behavior as all investors want the quick buck now. C-level folks doing this won't be around to see the long term company saddled with debt and nothing to show for it.

This behavior is bringing forward future economic benefit into today at the expense of the company's future. It is no different than the behavior of debt under any other circumstance - it brings forward future economic productivity and handicaps future performance. In the corporate world, it's actually worse, because it provides no income stream for the future.

murray t turtle · Jan 4, 2016

nitro said:
The Bern just talks about the big banks. What about endless buybacks?

Well, Nitro;
i cant really blame him for hating what big banks did to the US taxpayer, like Citigroup[=bailed out by US taxpayer] tried to buy a overpriced airplane about the time of 2008 downtrend-LOL

However i disagree with him , heard him on talk radio, he seemed to think banks should charge same interest rate for homes[secured] ,as students loans[unsecured].LOL He also has good points about busting the trading part of banks, away from FDIC part, if that is what he meant?? Volker was for that also...........................................................

ETcallhome · Jan 4, 2016

piezoe said:
If you accelerate your borrowing at unusually low interest rates than you are projecting higher rates in the future.

I didn't buy the company because I thought they were good bond traders, and I didn't buy because they can just give me my own money back in the dividend. And if I thought it was a good idea for them to buy back I would just buy more.