Returning capital is often not the only reason companies buy back their shares in the market

This column received some negative feedback last week, following its take on DBS chief executive Piyush Gupta unloading shares right after the bank reported strong Q3 2024 earnings and unveiled a S$3 billion share buyback programme.

While some readers agreed the optics were not good, many others took the view that DBS and its CEO had done nothing wrong. In fact, some readers thought Gupta was simply reaping his just rewards.

Their argument seemed to go something like this: The whole point of share-based remuneration is to align the interests of a company’s top executives with those of its shareholders. So, why should Gupta not have been allowed to sell his DBS shares as the market reacted to news of strong performance and a share buyback programme that he had helped deliver?