For one thing, buybacks aren't charged against profits. Compensation is.

What does that even mean? Both stock buybacks and dividends are the distribution of profit.

Compensation expenses (such as stock options, RSUs, etc) are accounted as expenses, which of course reduces profit.

Here's what you said: "If companies want to reward executives directly they can cut out shareholders entirely and pay salaries and bonuses. If companies want to reward shareholders (including executives) they can pay dividends (which Apple did do under Jobs). Nothing about the priorities of companies changed with share buybacks."

My response (and the whole thread) is pointing out that buybacks are another way to reward executives who have received shares as compensation. Buybacks are not reported as an expense. They are reported as an investment.

This is all boilerplate, very far from "what does that even mean?" territory.

Dividends work as well for executives rewarded with stock (unless it's options).

Buybacks are sort of pay-in-kind dividends, sure. Nobody really loves returning actual money to investors. It's contrary to nature.

A buyback is literally returning actual money to investors.

> Here's what you said

Different person.

As others have mentioned that isn't comparable because salaries are taxed. The tax rate on unrealized gains in the US is zero percent from what I understand.

Not correct. Capital Gains taxes depend on the holding period. Short term capital gains (stock held less than a year) are taxed at the same rate as salaries (ordinary income rate). Long term capital gains (stock held at least a year), are taxed on a reduced level that peaks out at 20% (depends on total taxable income) with a possible additional 3.8% Obama Net Investment Tax.

So I buy a stock on Jan 1 for $1 and by June 15 it is worth $100. I'm going to pay $99 of short term capital gains at that point?

Cool. You covered short term gains and long term gains. Could you answer the question, which was unrealized gains?