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From Value Creation To Value Extraction

October 12th, 2014 · No Comments

  • When the SEC greatly facilitated corporate share buybacks and executive pay was tied to the stock price, the elements were in place for management to game the system.
  • Stock markets became vehicles for massive extraction, rather than funding, of corporations as these embarked on enormous share buybacks which boosted share prices and executive compensation.
  • While this has been the major fuel behind an epic stock market rally, the system isn’t without significant cost.

From Value Creation To Value Extraction | Seeking Alpha

Tags: Reform Capitalism