Brett Arends Writes A Scare Column For Marketwatch

He's a columnist for Marketwatch.com;  this morning he has the honor of defining the daily scare story that Marketwatch seems to favor, i.e., corporations are limiting stock buy-backs and this is bad.

Not necessarily.  When a corporation takes some of its profits and buys back stock, that forms a 100% stock dividend for the selling shareholders.  The remaining holders thereafter own a bigger portion of the company although it's one with less cash in the bank.

So far so good.  But we don't focus on share buy-backs without also considering how those acquired shares are used by the corporation.  We note that all too many turn right around and distribute the stock to employees in the form of stock option bonus arrangements.  Nothing wrong with that unless some of the top leaders of the corp receive excessive awards.

For example, look at this news item from the San Jose Mercury-News: The Bay Area's highest-paid boss by far, Ellison made nearly all of his $78.4 million last year in the form of 7 million stock-option shares, an amount he has consistently received since 2006, according to the Redwood City corporation's regulatory filings. But Monday, Oracle in another filing listed his annual stock options at just 3 million.