"Prior to 1982, stock buybacks were considered market manipulation and were illegal under SEC rules. Whether buybacks should be outright illegal or not, they are a sign that a company thinks so little of its own products, services, and market potential that its capital should be diverted from growth and towards financial engineering."
Performance based compensation, were share value is the key measure/indicator for performance, leads to this kind of culture.
There are legitimate reasons for stock buybacks, but when they're being used for nothing more than short-term increases (in share prices), then that says something about the system.
That's very well put.