Cash in hand is cash. Framing it as “no money spent” is disingenuous.
Especially when your entire team gets lower bonuses after a successful product launch, while the company spends $8B profit in buybacks with minimal impact on share price. Large funds and executives get rewarded (10% of millions is a nice amount), employees get shafted.
> while the company spends $8B profit in buybacks with minimal impact on share price
Well, there must have been an impact of $8B, so it depends what the counterfactual was. It could've been going down at the time.
> Large funds
Generally speaking large funds are passive index funds, so that doesn't mean someone actually owns a lot of them - they're just in average people's retirement accounts. But it gets reported as if BlackRock (iShares) or Vanguard own the company, which leads to conspiracy theories.
Buybacks don’t linearly increase share price, the stock is simply exchanging hands. If the company already has a 100B market cap, that amount is not making any huge waves, especially spread around a full year.
Replace “large funds” with “large shareholders”, the point is that employees receiving relatively tiny stock compensation do not benefit much.
> Buybacks don’t linearly increase share price, the stock is simply exchanging hands
Sure they do. Each repurchased share no longer exists, unless they're issuing new ones at the same time. The total value of the company stays the same, or something else might happen to change the price afterwards, but it should indeed be a linear increase.
The shares don’t cease to exist, they are simply not in the market anymore. And the cash used to buy them already belonged to the shareholders in the first place, no value is added other than price pressure from the reduced float. Market dynamics aside, it is a net zero transaction.
Aside from that, they're value neutral to the company. They're not spending money, any more than you buying stocks is.