Is management smart enough to know how this will impact perception of compensation?
Personally, this seems like a preliminary slap in the face. 2 years of no raises (and cut of 401k matching) and inflation would reason that raises less than 5% will be viewed as inadequate. Which I already expect.
With the buyback announcement I feel like I'm somehow going to be even more disappointed come January.
Buy $10 Billion worth of Tesla stock instead of EM stock and count that as a “Green Investment “.
This one made me mad. The dividend is still plenty generous, we didn't cut it (so buy and hold worked out well in a huge downturn) and it has a long way to run. Buybacks are weak and expensive. But I guess buybacks signal confidence to Investors?!
I'll tell you what would signal confidence, take a tip from @1imi+1dyylsDs comment (rephrased as a recommendation!):
"...spend the $10B on high rate of return ventures, give us raises, fix our crumbly infrastructure and invest for our future..."
What a missed opportunity.
It's a way for EM to force stock holders to not sell their shares. I believe stock buybacks and NUA should be outlawed as it forces long term share holders to keep shares they would otherwise sell.
Shareholder interest trumps everything else (in case us employees haven't internalized this), and management will continue sacrificing employees for GI - "leaders" die last in EM.
They don't need employees, they just need crude oil prices to be high. Something that no amount of employees employed can change. So why not just cut down to the bare minimum staffing?
From what I have seen with EM stock buybacks:
Instead of the $200 Billion in buybacks that literally is like burning the money, what if EM had paid off all debt and not sold off things like 50% of Guyana?
It benefits shareholders, which own the company. The executives happen to be shareholders yea, but it’s not as if they own 40% or something. Additionally, your math assumes that we won’t be adding any shares over that time, which is untrue. Employees (at more CL levels than previously) will be compensated with stock. That doesn’t just appear from thin air. The company can only issue so many shares.
Your options are to throw out common sense and how all shareholders of all companies incentive employees to align with shareholder interest, or to do some buybacks and benefit shareholders (who own the company and this control decision making) and have executives, managers, and employees who work to do what the shareholders want.
https://www.zerohedge.com/markets/40-bull-market-due-soley-buybacks
Stock buybacks only support the XOM executives compensation! We are corrupt and unethical and immoral from the top down.
$10 billion buyback at $65/share is equal to the repurchase of 154 million shares.
So what do you get for $10 billion in repurchases? You now avoid paying dividends on those shares: 154 million shares x $3.52 annual dividend equals $540M in savings.
So to save $540M in dividend payments you need to spend $10 billion. Takes 18.5 years to recapture/payoff your investment.
What a great use of our dollars, eh? Sounds like corporate and our new CFO used the same analysis for repurchases that we used for Kearl, XTO, "Lean Into" and "Value Added Chain" Strategies and Tillersen's $200 billion in stock buybacks.
So who benefits from buybacks? The stock price will probably go up and EPS will go up, but to benefit you must sell your stock. So our wonderful executives will sell their stock and profit. Since our executives are hugely compensated based on stock price performance and EPS, they will get more XOM shares in 2022. And the cycle of corruption continues.
And instead of spending the $10B on high rate of return ventures, or giving us raises or fixing our crumbly infrastructure and investing for our future they will continue to PIP us, take away our benefits, no raises and lastly the pension will be dissolved.
Executives don’t give a damn about you and me. That has been made clear over and over again.
Total compensation will be just enough to keep you in your seat. That is the strategy
You think the 2 are connected?
Ha!
Your Jan paycheck is calculated to be just enough to retain you, or someone equivalent that can do your job. DW and Dallas could not care less about the employees themselves.
It contributes to boosting shareholder wealth (including employees, but more specifically and more significantly the wealth of executives)