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Politics : Ask Michael Burke

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To: Greg Jung who wrote (73424)1/13/2000 12:22:00 AM
From: Fred Fahmy  Read Replies (1) of 132070
 
Greg,

<So Intel really is earning a lot of money, which is used
directors and employees (insofar as a particular employee class gets compensated with stock/options). Where does the shareholder stand in the food chain? (Hint: not at the front).>

Actually, Intel finds lots of things to spend money on other than the buyback <g>.

<no value is realized by the stockholder.>

Not quite "no value". When they buy back shares, the number of shares comes down or goes up less then it would otherwise. Total shares are are going to tend up without a buyback because of executive compensation. As you suggested, for better or worse, options are a large part of corporate Americas compensation package for execs. Without a share buyback program the shares outstanding would increase that much more. Keep in mind, this is not a defense of buyback programs. IMO, they should be reserved for use only when a company's stock is clearly undervalued.

FF
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