1969, 1973, 1981, 1990, 2000, 2007 - a recession of US economy at least every 10 years, like a clockwork.
So, if you're a CEO of an airline and you're giving away 90% of your cash to shareholders instead of saving it to last few months when business declines, then it's an obvious failure of planning.
Or, more accurately, it's yet another case of "It Is Difficult to Get a Man to Understand Something When His Salary Depends Upon His Not Understanding It."
CEO salaries and bonuses are tied to performance of the stock (because they are set by board of directors, who are there to represent shareholders). So they spend the money to buy back the shares which increases the share price and their bonuses.
A recession is not.
From https://en.wikipedia.org/wiki/List_of_recessions_in_the_Unit...:
1969, 1973, 1981, 1990, 2000, 2007 - a recession of US economy at least every 10 years, like a clockwork.
So, if you're a CEO of an airline and you're giving away 90% of your cash to shareholders instead of saving it to last few months when business declines, then it's an obvious failure of planning.
Or, more accurately, it's yet another case of "It Is Difficult to Get a Man to Understand Something When His Salary Depends Upon His Not Understanding It."
CEO salaries and bonuses are tied to performance of the stock (because they are set by board of directors, who are there to represent shareholders). So they spend the money to buy back the shares which increases the share price and their bonuses.
It's really simple if you know the incentives.