Co-opting the Shareholder Value Movement: A Class Analytic Model of Share Repurchases

Abstract

This paper investigates the relationship between labor, shareholders, and CEOs to reflect the simultaneous rise in share repurchases after 1980, the increasingly exploitative outcomes for labor, and the rise of CEO compensation. The paper finds that although institutional investors may have pressured firms to be more profitable, they were not powerful enough to appropriate all of the gains. Rather, capitalists (CEOs) have been able to partially co-opt the shareholder value movement at the expense of both labor and shareholders. Important components of this conclusion are the use of stock options and the benefits to capitalists for seemingly distributing funds to shareholders with share repurchases.