Warren Buffett isn't wrong that share repurchases have legit uses, but Joe Biden isn't "economically illiterate" or a "silver-tongued demagogue" for pointing out that there's a problem.
Executive-to-worker pay ratios have skyrocketed. And these share-price steroids have allowed some companies to paper over poor governance at the executive level. Look no further than Facebook (Meta) on this one, whose chief executive has overseen stagnation in the firm’s main business, a so-far disastrous pivot to the “metaverse,” a serious round of layoffs, and, soon after those job cuts, the announcement of a $40 billion stock buyback plan.
“You've got one person who is the CEO and the chairman and the largest stockholder in the company, and he frankly is responsible for a number of bad business decisions,” Connor says. “The share price took an almighty hit, and the solution was something close to a gimmick to try and bring it back.”