The Harvard Law School Forum on Corporate Governance https://corpgov.law.harvard.edu The leading online blog in the fields of corporate governance and financial regulation. Tue, 21 Apr 2026 11:32:56 +0000 en-US hourly 1 https://wordpress.org/?v=6.5.8 https://corpgov.law.harvard.edu/wp-content/uploads/2024/02/cropped-photography-4-e1706898544564-1-32x32.png Examining Corporate Priorities: The Impact of Stock Buybacks on Workers, Communities and Investors – The Harvard Law School Forum on Corporate Governance https://corpgov.law.harvard.edu 32 32 Examining Corporate Priorities: The Impact of Stock Buybacks on Workers, Communities and Investors https://corpgov.law.harvard.edu/2019/10/22/examining-corporate-priorities-the-impact-of-stock-buybacks-on-workers-communities-and-investors/?utm_source=rss&utm_medium=rss&utm_campaign=examining-corporate-priorities-the-impact-of-stock-buybacks-on-workers-communities-and-investors https://corpgov.law.harvard.edu/2019/10/22/examining-corporate-priorities-the-impact-of-stock-buybacks-on-workers-communities-and-investors/#comments Tue, 22 Oct 2019 13:24:57 +0000 https://corpgov.law.harvard.edu/?p=123497?d=20191022092410EDT Posted by Lenore Palladino (Roosevelt Institute), on Tuesday, October 22, 2019
Editor's Note:

Lenore Palladino is a Senior Economist and Policy Counsel at the Roosevelt Institute. This post is based on her recent testimony before the United States House of Representatives’ Committee on Financial Services. Related research from the Program on Corporate Governance includes Short-Termism and Capital Flows by Jesse Fried and Charles C. Y. Wang (discussed on the Forum here) and Share Repurchases, Equity Issuances, and the Optimal Design of Executive Pay, by Jesse Fried (discussed on the Forum here).

Thank you, Chairwoman Maloney and Ranking Member Huizenga, for inviting me to speak today [Oct. 17, 2019]. It is an honor to be here. My name is Lenore Palladino, and I am Assistant Professor of Economics & Public Policy at the University of Massachusetts Amherst, a Fellow at the Roosevelt Institute, and Research Associate at the Political Economy Research Institute.

I join you today to discuss the causes and consequences of the rise of stock buybacks. Stock buybacks may sound like a technical matter of corporate finance: Why should it matter whether or not corporations repurchase their own stock? When a company executes a stock buyback, they raise the price of that company’s shares for a period of time, but the funds spent on buybacks are then unavailable to be spent on the types of corporate activities that could make the company more productive over the long term: investments in future productivity and in the workforce. Stock buybacks are one of the drivers of our imbalanced economy, in which corporate profits and shareholder payments continue to grow while wages for typical workers stay flat.

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