An analysis of how much the companies have used our premiums and tax dollars to buy back shares of their own stock showed that they spent a combined $141 billion on share repurchases between 2007 and 2022.
Keep in mind that that is $141 billion that otherwise could have been used to reduce our premiums and deductibles — and keep an untold number of American families out of bankruptcy and away from GoFundMe campaigns — but was instead used to increase the wealth of their shareholders and top executives.
A strong case can be made that the biggest beneficiaries of the stock buybacks are the companies’ CEOs. That’s because the value of the shares of stock they hold increases every time their companies repurchase shares.
It works like this: When a company buys back shares, it reduces the number of shares outstanding, and that has the effect of inflating the value of each share of stock.
I benefited from this gimmick myself when I was at Cigna because a portion of my compensation was paid — in one way or another — in stock.
What I was paid in stock, however, was a tiny fraction of what my CEO was paid. As I told reporters when I was Cigna’s chief spokesman, about 90 percent of the CEO’s compensation was “at risk,” meaning that most of what he was paid was based on how well the company met shareholders’ financial expectations, specifically whether and how much the company increased the value of each share of stock (earnings per share, or EPS).
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