This site is in beta mode while we add the remaining policies. To feedback or help, please get in touch!
In Progress
Prevent the use of share buybacks

We will commission an examination of the use of share buybacks, with a view to ensuring these cannot be used artificially to hit performance targets and inflate executive pay.

Our Verdict

A ‘share buyback’ is when a company buys back its own shares from the stock market. UK companies spent £15bn buying back their own shares in the 12 months to 31 January 2018.

Fears have risen as to whether companies are buying back shares from the market to reduce the number of shares available, thereby increasing their individual value and increasing a company’s earnings per share. Many executive pay packages are based on the amount of earnings per share, so the use of share buybacks therefore can be used to inflate executives’ earnings.

In January 2018 the government confirmed its plans to research whether companies buy back their own shares to inflate executive pay. This was part of the broader package of corporate governance reform.

To investigate the use of share buybacks, the government has enlisted PwC and Alex Edmans, a professor at the London Business School to research the issue.

The findings from this investigation are yet to be published so this policy is currently ‘in progress’. Follow this policy for updates.

Extra reading…

There's always room for debate

We’re serious about providing clear, up-to-date, non-partisan information. We focus on being consistent and fair in how we track policies, and always explain our reasoning. But there is always room for debate. So if you see it differently, we’d love you to tell us why or submit an edit.

Get involved!

Whether you are for or against this policy or just want to know more, it's never been easier to get involved and have your say. Try these for starters…

Join the discussion On this page, or Twitter, or Facebook. Democracy is better shared!
Follow this policy We'll send you email alerts every time something interesting happens.
Ask your MP Ask your MP to help you support or block this policy - write to them here.
Get the facts Sense about Science and Full Fact are great for evidence and fact checking.
Get ahead! The Simple Politics newsletter breaks it all down for you - before it happens!
Comments