Profits Without Prosperity (2014)
(2014)This is the Harvard Business School Review. When HBR says something that increases CEO pay is a bad idea, it almost certainly is.Stock buybacks are an incredibly inefficient way of increasing CEO pay. Especially if they involve taking on debt.We need to tax corporate dividends, interest paid, and stock buybacks at the same rate.  There's a bias against dividends and in favor of debt in tax law, and that's why companies take on so much debt.  It's a subsidy program for the banking industry, which is why it's hard to change in the US. It doesn't particularly help non-financial corporations.Also, "private equity" is mostly debt financing in disguise.  It's not people putting up their own cash. There's usually a little cash, and a lot of debt.Something worth realizing: relative tax rates between business alternatives have a large effect on corporate behavior.  Absolute tax rates, not so much. As capital gains rates have gone up and down over the years, capital expenditures haven't followed.