Stock Buyback (Share Repurchase)

A corporate action in which a company purchases its own outstanding shares on the open market, reducing the share count and increasing earnings per share for remaining shareholders. Buybacks became the dominant form of shareholder return starting in the 1990s, surpassing dividends, partly because they offer greater tax efficiency and flexibility. Critics argue that excessive buybacks come at the expense of capital investment and employee compensation, while supporters view them as an efficient way to return excess cash to shareholders.