Just curious about shareholders opinions about the on-market buybacks- the pros and cons.
Its normally supported by institutions such as super companies, custodian and nominees companies who like to reward themselves in a similar fashions - the metrics improves their bonuses on suspect reasoning or intentional deceptive criteria.
If u don’t believe my comments look at a number of examples of the top 20 shareholders in any number of Aussie companies and ask yourself whether they reward themselves, in the same fashion or similar fashion that they’re about to vote on. It would be in their interest to propagate this self serving interest!
That is why the voting system needs to be reviewed to be more inclusive of all shareholders - and be be promoted as an encouragement, for increased participation .. not as currently being a disincentive to get involved. The common reason is "why bother, the big end off town determines the outcome.
NAB chairman proved that the restraint of the big end of town behaviour needs to be controlled.
As the Chairman he admitted that many members got rewarded for not meeting the STI and LTI because it was at the discretion of the BOD... taking care of their mates!
Unfortunately it is normally gets voted in, because of my arguments mentioned above and it excludes or invalidates the majority’s views by the swamping affect that is allowed by the poll voting system.
The company shouldn’t only consider the tax efficiency from their point of view, but should consider the tax efficiency of the individual shareholders.
They should consider a special dividend or bonus shares as possibly being a more tangible reward to the individual shareholders then on pure theoretical expectation of on-market BB.
There is also an argument that buyback is to get rid off small shareholders or those that are a pain in the back side like me!
Radicool Views
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