Corporate Share Repurchase Programs Draw Increasing Criticism

Since 2009, corporate share repurchase programs have been a ubiquitous feature of many public companies’ capital allocation strategies. Generally, these programs have been applauded by institutional shareholders, while raising little concern by other parties. That dynamic is now changing with share repurchase programs drawing sharp criticism from politicians, state and union pension funds, and others.

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Recently, politicians, the media, academics and governance experts have criticized company stock buyback programs as a mechanism for enriching shareholders and executives through short-term boosts in a company’s stock price, while harming employees and misallocating capital to the detriment of…