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Stock Buybacks

Stock buybacks are the practice of repurchasing company shares on the open market, reducing the outstanding number of shares, thereby increasing share price.
Across the U.S. economy from 2015 - 2017, companies spent 58.6% of their net profits on stock buybacks. From 2015 - 2017, the U.S. restaurant industry spent more in stock buybacks than it made in profits - 136.5%. Buybacks were financed through debt and cash reserves. If McDonald's redirected all 2015 - 2017 funds used on stock buybacks to raises for its employees, it could have given each of its 1.9 million workers nearly $4,000 more per year. If Starbucks reallocated its funding from stock buybacks to worker wages, every worker would receive a $7,000 raise. If Lowes, Home Depot, and CVS each reallocated the money spent on buybacks in 2015 - 2017 to workers, each worker would receive a raise of at least $18,000 per year. A primary criticism of stock buybacks is that they draw corporate resources away from other growth-inducing activities, like investing in research and development, spending on capital investments, or improving worker compensation.
Investment-Less Growth: An Empirical Investigation Buybacks Around the World Fighting Short-Termism with Worker Power U.S. Senator Tammy Baldwin Introduces Legislation to Rein In Stock Buybacks and Give Workers a Seat at the Table Stock Buybacks and Corporate Cashouts Curbing Stock Buybacks: A Crucial Step to Raising Worker Pay and Reducing Inequality
Thomas Philippon Germán Gutiérrez Theo Vermaelen Urs Peyer Alberto Manconi Susan Holmberg Robert J. Jackson Jr. Katy Milani
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