Capital Allocation

How to make the most important decisions facing CEOs and CFOs

In 2013, Apple shareholders mounted a revolt against Tim Cook because they didn’t approve of Apple’s growing cash piles and wanted Cook to distribute the cash to shareholders. Why would it matter if the cash was on Apple’s balance sheet or in shareholders’ pockets? Since then, Apple has distributed more than $280 billion to shareholders, largely by buying back shares. Was that wise?

At the time of the revolt, Alphabet (aka Google) changed its shareholding structure to ensure that it would never face such a challenge by increasing the voting rights of key shareholders. Since then, Alphabet has generated mountains of cash but has distributed very little, choosing ...

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