Why CEOs love buybacks and dividends

Bloomberg writes that “11 of the 15 non-financial U.S. companies that spent the most on buybacks last year base part of CEO pay on earnings per share or total shareholder return, or both. And these metrics get a boost when businesses return cash to investors. Linking compensation to buybacks and dividends can encourage managers to sacrifice funds that could be used for long-term investments. It also raises the prospect that executives are being paid for short-term returns rather than running a business well.” (VIEW LINK)