Corporate Share Buybacks : Impact on Equity Incentive Pay and Shareholder Value Hardback
by Gilbert Amahoro Ndayisaba, Abdullahi Dahir Ahmed
Part of the Banking, Money and International Finance series
Hardback
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Description
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.
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Out of StockMore expected soonContact us for further information
- Format:Hardback
- Pages:208 pages, 19 Tables, black and white; 10 Line drawings, black and white; 10 Illustrations, black an
- Publisher:Taylor & Francis Ltd
- Publication Date:05/12/2023
- Category:
- ISBN:9781032131146
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Information
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Out of StockMore expected soonContact us for further information
- Format:Hardback
- Pages:208 pages, 19 Tables, black and white; 10 Line drawings, black and white; 10 Illustrations, black an
- Publisher:Taylor & Francis Ltd
- Publication Date:05/12/2023
- Category:
- ISBN:9781032131146