Carl Icahn’s Bad Advice: Stock Buyback
Rather, he says, the critical incentive for buybacks has been that chief executives are paid primarily in stock. Share buybacks may remove capital from the company, but when they raise the stock price, they enrich the boss.
.. As for Apple, in the late 1980s and early 1990s, when John Sculley was chief executive, the company spent $1.8 billion buying back its own stock. That was money it could have really used when the company then stumbled and needed to issue junk bonds — and issue $150 million in convertible preferred stock to Microsoft — just to survive.