Company: GOOGL
Filing Date: 2025-04-25
Form Type: DEF 14A
Source: 0001308179-25-000511
Chunk: 54

Company: Alphabet Inc.
Filing Date: 2025-04-25
Form: DEF 14A
Chunk 54
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 operational results and the individual contributions of senior executives, not financial engineering. Stock buybacks directly affect many of the financial ratios used as performance metrics for incentive pay of senior executives. For example, stock buybacks can increase earnings per share, return on assets, and return on equity. While stock buybacks may also boost stock prices in the short term, we are concerned that they can deprive companies of capital necessary for creating long term growth. In our view, senior executives are responsible for improving our company’s operational performance, whereas the Board of Directors is responsible for determining when stock buybacks are appropriate. Academic research has shown that stock buybacks that increase earnings per share are more likely when a firm would have just missed analysts’ earnings per share target. 1Given this potential for manipulation, we believe that senior executives should not receive larger pay packages simply for reducing the number of shares outstanding. In 2023, S&P 500 Index companies spent a combined total of $795 billion on stock repurchases and another $588 billion on dividends, totaling more than 85 percent of their reported earnings. 2This is a concern because retained earnings are a primary source of new investment. Academic research has shown that stock buybacks decrease capital expenditures and R&D spending, resulting in lower market-to-book ratios, profitability, innovation, and growth in the long run. 3 Our company spent $62.2 on share buybacks in 2023, but only $45 billion on research and development, and $32 billion on capital expenditures. Our company’s executive compensation is primarily driven by total shareholder return, a financial ratio that can be inflated by stock buybacks. For these reasons, we urge you to vote FOR this proposal.

| (1) | Heitor Almeida et. al.,, “The Real Effects of Share Repurchases,” Journal of Financial Economics, January 2016, https://doi.org/10.1016/j.jfineco.2015.08.008.                          |
| (2) | S&P Dow Jones Indexes, “S&P 500 Q1 2024 Buybacks Increase 8.1% From Q4 2023,” June 17, 2024,                                                                                            
 https://www.spglobal.com/spdji/en/documents/index-news-and-announcements/20240617-sp-500-buyback-q1-2024.pdf.                                                                           |
| (3) | Zigan Wang et. al., “Real Effects of Share Repurchases Legalization on Corporate Behaviors,”