Comment by helsinkiandrew
Comment by helsinkiandrew 6 hours ago
> Share buybacks allow companies to reward executives directly as their compensation is tied to stock price.
To be fair share owners also like the stock price to go higher, they also like dividends (and higher dividends would tend to drive the stock price higher too), but an X% increase in share price caused by buybacks is favoured over an X% dividend because it isn’t immediately taxed.
Also, I believe in the US ordinary dividends are taxed at the income tax rate which is much higher than the capital gains rate.