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by zenmaster10665 1234 days ago
People forget that stock buybacks also create a pool of equity for employee compensation, it isn't just about returning capital tax effectively
1 comments

In fact, despite years of buybacks, Meta's outstanding shares have been mostly flat.

Historically their buyback has only compensated for employee equity comp, not much more. That probably changes a bit going forward

https://www.macrotrends.net/stocks/charts/META/meta-platform...

I'm trying to figure out if there's a tax advantage to anyone from an RSU + buyback scheme vs straight cash to employees. Seems like it'd be net 0?
I don't think it's about tax advantages but flexibility for the conpany. RSUs usually vest over several years. If times get tough you can slow/stop buybacks. Eventually that would have an effect on the price from dilution but it'd be slow. You can't just not pay out cash awards that have already been scheduled (unless you opt for layoffs, but that's a big hammer).
It's also about aligning employee incentives with company success
> In fact, despite years of buybacks, Meta's outstanding shares have been mostly flat.

They were mostly flat in 2018-2020. They were down 4% in 2021 and 5% in 2022.

Meta share count is only down 6% total since the start of the pandemic. And down ~10% total since their share count peak in 2017

Looks like you're referencing YoY rates as measured on a quarterly basis from the link above, which is not the same as the absolute percentage of shares.

Likely the pace will rise somewhat with recent job cuts/buybacks, but historically they've mostly just tread water with shares issued via software based comp

> And down ~10% total since their share count peak in 2017

That seems compatible with what I said (flat 2018-2020, down 4% in 2021 and 5% in 2022).

> Looks like you're referencing ...

https://s21.q4cdn.com/399680738/files/doc_financials/2020/ar...

  As of December 31, 2020, there were 2,406 million shares of Class A common stock and 443 million shares of Class B common stock issued and outstanding.
https://s21.q4cdn.com/399680738/files/doc_financials/annual_...

  As of December 31, 2021, there were 2,328 million shares of Class A common stock and 413 million shares of Class B common stock issued and outstanding.
2021: 2849 -> 2741

We don't have the end of year figures yet but from the Q3 report:

https://d18rn0p25nwr6d.cloudfront.net/CIK-0001326801/d3f3edd...

  2,248,672,204 shares outstanding as of October 21, 2022 
  402,876,470 shares outstanding as of October 21, 2022

  Class A shares [...] 2,262 million [...] outstanding, as of September 30, 2022 
  Class B shares [...] 403 million [...] outstanding, as of September 30, 2022
and from yesterday's earnings release:

  Weighted-average shares used to compute earnings per share attributable to Class A and Class B common stockholders (Three Months Ended December 31, 2022): Basic 2,638
While we wait for the filing we can take a guess:

  Sep 30: 2665
  Oct 21: 2652
  Q4 average: 2638
  Dec 31: ~2615 ?
> As of December 31, 2022, there were 2,247 million shares of Class A common stock and 367 million shares of Class B common stock issued and outstanding.

2614. Not bad!

8.2% fewer outstanding shares than two years ago. If that’s “mostly flat” so be it.