Corporate Share Buybacks: Impact on Equity Incentive Pay and Shareholder Value (Banking, Money and International Finance)
By: and
Sign Up Now!
Already a Member? Log In
You must be logged into UK education collection to access this title.
Learn about membership options,
or view our freely available titles.
- Synopsis
- This book integrates elements from agency theory and signalling theory and draws upon recent changes in the Australian payout policy and incentives pay for risk-averse employees to provide theoretical and empirical analyses that explain the paradox of the popularity of on-market stock buyback activities in a market environment characterised by reasonably high share prices. The authors utilise a dynamic model that rationalises this paradox, which is divided into three components. The first component predicts that executives may be conducting on-market stock buyback programmes (SBPs) to adjust equity-based remuneration for risk-averse employees, thereby motivating their performance without granting them additional costly equity incentive plans (EIPs); the second component predicts that companies are likely to invest in SBPs to increase the ownership stakes of employees in the firm, thereby inducing risk-averse employees to increase their productivity which increases firm value; while the third component predicts that shareholders would benefit from incentives-induced buybacks if a firm’s opportunity cost of funds spent on buybacks is less than its inverse price-to-earnings ratio. The authors’ findings highlight differences in the market responses towards announced repurchase motives, implying that not all incentives-induced buybacks are value-destructive buybacks. Specifically, the widespread assumption that SBPs stifle investments in human and capital stock may be subjective as the findings show that incentives-induced buybacks may be value-creative or value-destructive depending on share repurchase motives of SBPs. This book will be a useful guide for scholars and researchers of finance, corporate finance, financial economics and financial accounting.
- Copyright:
- 2024
Book Details
- Book Quality:
- Publisher Quality
- ISBN-13:
- 9781003815501
- Related ISBNs:
- 9781003227748, 9781032131146, 9781032131160
- Publisher:
- Taylor and Francis
- Date of Addition:
- 12/11/23
- Copyrighted By:
- Gilbert Amahoro Ndayisaba and Abdullahi Dahir Ahmed
- Adult content:
- No
- Language:
- English
- Has Image Descriptions:
- No
- Categories:
- Nonfiction, Business and Finance
- Submitted By:
- Bookshare Staff
- Usage Restrictions:
- This is a copyrighted book.