In this Q&A, new Oxfam-PolicyLink research reveals how this widespread corporate practice is distorting the stock market—and worsening racial inequality.
Stock buybacks don’t get a lot of mainstream attention—but they should. In today’s struggle between ultra-wealthy CEOs and everyday workers, how mega-corporations and some of their billionaire executives make their money is increasingly under the microscope given the state of inequality and poverty in the U.S.
But how exactly do they work? New Oxfam-PolicyLink research reveals how these financial transactions worsen economic inequality and overwhelmingly benefit white, wealthy households. In 2026, that’s a stand-in for what not to do when CEO pay in the U.S. increased more than 20 times faster than workers’ wages in the last year.
We sat down with Irit Tamir, Oxfam’s senior director of Corporate Accountability and Worker Justice, to talk about the findings of this new research and how stock buybacks fit into this moment of rising billionaire wealth and obscene levels of inequality.
What are stock buybacks?
Tamir: Stock buybacks are when a company uses its cash to purchase its own shares from the stock market. It’s an increasingly popular way to push a company’s stock price higher.
So let’s say a corporation had a strong year, and it’s deciding what to do with that extra cash. Do we give workers raises or bonuses? Maybe reinvest that cash in research and development, paving the way for the future? Or do we send it directly to our shareholders, as a thank you “dividend?”
Some companies decide: No, we’re going to do something different. We’re going to take that extra cash and purchase our own stock on the open trading market. Each remaining available share represents a larger slice of the business—pushing up the earnings per share.
One notable example: When President Trump and Congress worked together to cut corporate taxes in 2017, rather than invest the tax savings in higher wages for workers, companies spent a large portion on stock buybacks and dividends—making their existing shareholders richer.
Why do companies buy back shares?
Tamir: Companies buy back their shares for several reasons. Some executives think their companies are undervalued and want to try to increase their stock prices. Others use them as a strategy to prevent what are called “hostile takeovers.” By boosting stock prices, buybacks help make the company more expensive for others to acquire.
This practice—no matter the reason—is becoming very widespread. In September 2025, S&P 500 companies spent more than $1 trillion (a record) on buybacks over the last 12 months. And big corporations spending that much money on buybacks is becoming harder to justify at a time when workers’ rights are under threat.
How do buybacks reward rich CEOs and company shareholders?
Tamir: CEO pay packages are mostly based on stock compensation, and what high-level executives make is usually structured to increase when share prices go up. That means that CEOs and other high-earning executives have a strong personal incentive to do buybacks.
Who else benefits? If you are a corporate insider or professional trader with privileged information about the timing of these buybacks—as opposed to individuals like a nurse or a public-school teacher holding stocks in retirement accounts—you can make a lot of money by selling your shares when buybacks have boosted the price of shares.
Are stock buybacks bad for employees?
Tamir: Workers, especially low-income workers, often do not benefit from buybacks because they do not usually hold a lot of stock (or any) in the company or the stock market altogether. And we argue that excessive buybacks hurt workers further because they represent money that could have gone directly to workers, in the form of increased pay, benefits, training, and other workforce investments.
For example, a 2024 report by the Institute for Policy Studies found that home improvement company Lowe’s spent almost $43 billion on buybacks between 2019-2023, while the median worker pay was just $33,000. With that sum, the company could have given each of its 285,000 employees an almost $30,000 bonus every year over that five-year period.
How do buybacks risk widening the racial wealth gap?
Tamir: Let me start by first acknowledging a larger reality: Inequality in the U.S. is shaped by historic and continued racial and ethnic discrimination. Previous Oxfam research shows that between 1989 and 2022, the wealth of the average white household increased 7.2 times more than the average Black household, and 6.7 times more than the average Hispanic/Latin household.
So what’s the connection between buybacks and the racial wealth gap? Wealth—and corporate stocks in particular—are already unequally distributed among demographic groups in the U.S. Because white households own a disproportionate share of corporate stocks, buybacks end up benefiting an overwhelming majority of already wealthy white households.
Our new research brings into focus this disproportionate impact. With a focus on nonretirement stock holdings, we show that White households would have gained $9 trillion from buybacks from 1996-2025, equivalent to 91% of total shareholder gains. In sharp contrast, Black households would gain just $104 billion. And Hispanic households would receive even less: $93 billion.
Buybacks did not create the racial disparities that characterize the levels of wealth inequality that we see today. But they are a contributing factor, funneling trillions of dollars of wealth to a small sliver of society. If we do nothing, things can only get worse from now on.
What are three things that should be done to address the problem with stock buybacks?
Tamir: We need a new social contract for buybacks—real policy reforms and changes in corporate practice that make buybacks the exception and secondary to supporting workers who help create wealth for public companies.
First, we need to regulate stock buybacks more tightly. Before 1982, buybacks were viewed as a form of illegal market manipulation. But the U.S. Securities and Exchange Commission passed a rule that allowed the practice under broad limits. Couple that with no clear disclosure requirements and no enforcement mechanism, and you get the skyrocketing levels of buybacks that we see today.
Second, we need clearer limits on buybacks combined with stronger, real-time disclosure requirements. Investors, workers, and the public must have better information about when and how buybacks are happening. Just as an example, in France and Germany companies cannot buy more than 10% of outstanding shares. In Switzerland, stock buyback transactions are required to be fully disclosed publicly on a real-time basis. We need to make clear what companies in the U.S. can and cannot do.
Third, company executives and board members must act. Investing in workers is key to a company’s long-term performance. At a minimum, companies shouldn’t do buybacks when they’re laying off lots of workers, when they’re not paying their workers a living wage, and when they have underfunded pension liabilities. Boards should also review executive compensation plans to ensure they do not create incentives for opportunistic buybacks.