Originally Posted by
crazyjaydawg
Generally I agree that it’s a backdoor way to pay execs more and that sucks for those of us in the labor food chain. However it also sucks that if a publicly traded company carries to much cash, then institutional investors come after it; so something has to be done with it.
Ideally, a company has a good handle of their cash flow and plans CAPEX appropriately to minimize debt, but that’s challenge of corporate accounting and the C-suites’ responsibility.
Dividends put money in the hands of shareholders without inflating the stock price. Employer Stock Options tied to market cap instead of share price would reduce the incentive for price manipulation via share buybacks. The executive job is to increase the value of the enterprise by growing earnings and value and that is reflected in market cap.