How Stock Buybacks Can Affect Executive Compensation

The efforts by boards of directors to increase shareholder value often include buying back company stock. A stock buyback (“Stock Buyback” or “Buyback”) is the purchase by a company of its own stock, either on the open market or directly from its shareholders. A Buyback is also known as a “share buyback” or “stock repurchase.” Similar to a dividend, a Buyback is a way to return capital to shareholders. While a dividend is effectively a cash bonus amounting to a percentage of a shareholder’s total stock value, however, a stock buyback requires the shareholder to surrender stock to the company … Read more