smallgovt

You bring up many good points, none of which I strongly disagree with.

My only point was that it's not "easy and obvious" to "buy his debt and use it as leverage to extract political gain". There are many "outs" he can take if such an event occurred.

The argument you’re now outlining is not a subset of the arguments you previously listed (and I was referencing).

I agree buybacks create adverse incentives. As I’ve stated elsewhere in this thread, the damages of these adverse incentives are outweighed by the tax advantages buybacks have over dividends.

> It doesn't work this way. Companies aren't valued based on how much cash they have on hand.

Uh, yea they are. A company’s valuation is based on both the cash they have on hand AND future discounted cash flows.

Once you correct your understanding of this, you will see that GP is explaining things correctly.

> Many companies buy back shares when it doesn't really make sense

Many companies also issue dividends when it doesn’t really make sense.

The overall level of shareholder compensation (dividends + buybacks) has not increased over the last couple decades.

All of these arguments apply to dividends as well as share buybacks. And, therefore, do not support a shift back to dividends.

If you compare the dividend yield of the s&p500 from 1980 to today, it dropped by around 3%. Based on today’s market cap, that 3% equates to around $900b. In the last year, we’ve had around $700b in share buybacks for s&p 500 companies. These data suggest that the shift to buybacks did not negatively impact liquidity, r&d, or overall ability to maintain employment levels.

> There is no change in the value of the company. There are fewer shares outstanding though which means each existing share is worth more.

The company's value decreases by the buyback amount. Share price (ignoring positive signalling impact) remains unchanged.

E.g. Company has $100 market cap with 10 outstanding shares at $10/share. Company does $10 buyback. Afterwards, company has $90 market cap with 9 outstanding shares at $10/share.

> How Corporations Scam Their Shareholders and Screw over Workers

I don't see how workers are getting screwed. The main charge in the article is that executives take advantage of positive signalling around share buybacks to boost share price prior to selling shares. If this claim is true, the share price should go back down once more material public information is released that suggests a lower valuation. The losers in this scenario are shareholders who purchased in the short period following the buyback. Although some workers may fall into this group, the vast majority do not.

Also, the article implies that companies should go back to issuing dividends over share buybacks. This doesn't make sense. The tax advantage nature of share buybacks far outweighs the ill-gotten gains executives reap from this strategy.

On average, share price increases ~2% following a buyback announcement. So, while execs can 'scam their shareholders' with this scheme, the loss to shareholders is nowhere near the ~10-20% benefit shareholders get by realizing gains as capital gains instead of income.

> The opportunity to buy that debt and call it as leverage to extract political gain is so easy and obvious

If this happened, you don't think he'd be able to get another institution (or GOP constituent) to re-finance/backstop his debt for him?

2-300m in debt is a lot but his businesses pull in 4-500m in annual revenue. It's not a crazy debt-to-income ratio.

Yes, but I don't see how that applies to the subject matter at hand. There is no law that says an employer has to provide extra financial support to parents in extenuating circumstances like this.

> As a society, we decide what things are important to us and everyone gets to help support those, like it or not.

If GP doesn't care about supporting parents or future generations (and he is in a position to make this decision), it's certainly his prerogative to not do so.

Huh? You're not allowed to walk into someone's home and steal their stuff because we have something called a legal system that will punish you.

There is nothing in our legal system that compels you to care about future generations -- at least not in the way you're proclaiming.

These childless workers are 100% entitled to their opinions about equitable compensation -- and they're entitled to lobby for these changes as well.

We don't disagree on your point. I'm just pointing out that the degree of punishment enacted on the professor could be much less severe than most people are imagining.

I agree with you. My claim is that there's "less reason to be outraged at the Dean".

If the professor was executed for this, for most people, there's reason to go to war.

If the professor was fired, for most people, there's reason to be outraged.

If the professor was voluntarily placed on leave with pay, well, maybe you still find reason to be outraged, but less so than the aforementioned scenarios.

In any case, most people in this thread are assuming the professor was fired, and that's incorrect.

I think it's important to note that nowhere in the article (nor anywhere else I can find) does it state that the professor was "suspended". Rather, it only says that the professor will "no longer be teaching this class for the remainder of the semester".

I think this is an important distinction because it leaves the door open to the possibility that: 1) the professor voluntarily stepped down 2) the professor will return after the semester is over 3) the professor is being paid during this leave and will suffer no real professional consequences.

In other words, there's a real possibility that the Dean had the following conversation with the professor: "Hey, I know this wasn't intentional on your part, but this is quickly becoming a PR nightmare and I'd like to nip it in the bud. Would you mind stepping down from your post for just this semester until this dies down and I can get a handle on it? This will make everyone's life easier & you'll still get paid anyways."

In this light, there's less reason to be outraged at the Dean.

Ah, I hadn't considered that the interviewer was testing the applicant's ability to lie. Interesting, if true.

Huh, I don't know if I know one person who would honestly answer that question with a yes.