Companies historically are expected to pay dividends, at least when their business is doing well. Business at Intel was doing well for most of 1990-2017. There was some time after the Pentium 4 stopped scaling before the Pentium 4M offered a recovery, and the Itanium mess; but overall pretty good until 2017.
When a company with growth prospects does well it should invest those $$$'s into things like R&D and expansion. Companies that pay their profit as dividend are generally not expected to grow as much and their stock prices (P/E) tends to reflect that.
That said the taxation aspect is maybe a problem and should be addressed if it's not working as intended.
Yeah, buybacks are the new boogieman. Let me decide when to take the tax hit on an investment and not be forced.
I think that buybacks definitely create a massive conflict of interest for C levels remunerated based on share price or EPS, and I dislike that I must sell to realize any gains. But perhaps this is a niche position .
Starting from 1990 seems like a weird starting point, because it includes much of Intel's heyday when their profits were arguably well deserved. Is the implication that every business shouldn't have profits and should plow every cent back to R&D?
Instead of assuming my comment is a generalized view on how businesses should operate as whole (and not the subject of the piece), perhaps take a moment to consider how the magnitude of buybacks--in the face of stiff competition, that have now leapfrogged them--is directly correlated to the mismanagement and dysfunction within Intel that leaves them unable to rise to the challenge the country demands.
Stock buybacks benefit general shareholders (i.e. beyond employees) since they push up stock value without causing a taxable event. The alternative is dividends which are immediately taxed.