3. To Benefit Executives Mayne executives get the bulk of their compensation in the form of stock options. As a result, buybacks can serve a goal. So as stock options are exercised, buyback programs absorb the excess stock and offset the dilution of existing share values and any potential reduction in earnings per share.2By mopping up extra stock and keeping EPS up, buybacks are a convenient way for executives to maximize their own wealth.2 It's a way for them to maintain the value of the shares and share options.Some executives may even be tempted to pursue share buybacks to boost the share price in the short term and then sell their shares. What's more, the big bonuses that chief executive officers (CEOs) get are often linked to share price gains and increased earnings per share, so they have an incentive to pursue buybacks even when there are better ways to spend the cash or when the shares are overvalued.
MYX Price at posting:
$3.72 Sentiment: Buy Disclosure: Held
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