You miss the magnitude when you look at it this way. Consider: Texas Instruments is a publicly-traded company. By rights, you or I or anyone we know should be able to put down $120 and grab a share of Texas Instruments. What we should get out of that, aside from the warm fuzzy feeling of being a part owner of a multinational conglomerate, is the opportunity to sell our share for more or less in the future and our portion of the profits made by Texas Instruments every quarter. We call this the dividend. Texas Instruments has given out about $9 per share in dividends over the past five years. So for thee or me, we're making ten percent. yay! That cost them $9b. But Texas Instruments has also spent $4b buying shares from its fourteen directors for double the market value: Over that same time span, Texas Instruments sold 90.8 million shares to management and board members as they exercised options and restricted stock grants, for a total of $2.5 billion. That works out to an average sale price of $27.51. The difference in average purchase price and average sale price, multiplied by the number of shares so affected, is the direct monetary benefit for management. This is true whether or not management sells their new shares into the buyback or holds them. That amount works out to be $3.6 billion. So. The schlubs on eTrade made $9 a share. The board of directors get $185,000,000 each. It was either Graeber in Debt: the first 5000 years or Piketty in Capital in the 21st century who observed that historically, there have been two orders of magnitude difference between wages at the bottom of any structure vs. the top. Pope brings in 100x what the village priest does. Roman general brings in 100x what the lowliest centurion does. this was true of the managerial class until about 1990 or so. Jon Ronson hunted out six degrees of income separation in the United States in 2012.So people in management positions, have given themselves “bonuses” and stocks? It’s been this way as long as I was aware.
From 2014 through 2018, Texas Instruments bought back 228.6 million shares for $15.4 billion. That works out to an average purchase price of $67.37.
