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Inside executives and board members have a bias against special dividends and a preference for the buybacks and the enrichment of all, including themselves.
I believe some of your readers who wrote (Letters, Aug. 25) responding to Clifford Asness’s “Buyback Derangement Syndrome” (op-ed, Aug. 17) missed a subtle bias by insider executives and board members. Corporate insiders in management and on the boards usually have stock options that suffer valuation decreases from special dividends, which naturally only go to holders of outstanding stock. However, buybacks benefit both existing stockholders and option holders (unless too high of a price is paid relative to book value or future earnings). Thus, inside executives and board members have a bias against special dividends...