My understanding of a shareholder buy-backs is the definition given by Investopedia:
A stock buyback, also known as a "share repurchase", is a company's buying back its shares from the marketplace. You can think of a buyback as a company investing in itself, or using its cash to buy its own shares. The idea is simple: because a company can't act as its own shareholder, repurchased shares are absorbed by the company, and the number of outstanding shares on the market is reduced.
In "The Entrepreneurial State: Debunking Public vs. Private Sector Myths" by Dr. Mazzucato claims that shareholder buy-backs are a sign of stagnant economy that prioritizes stock prices and executive pay over things benefiting society:
We are witnessing an increased financialization of the business sector, with many companies spending more on share buybacks—to boost their stock prices, stock options, and executive pay—than on areas like human capital and R&D. As the work of Lazonick (2014) has shown, in the last decade, nearly $4 trillion has been spent on share buybacks by Fortune 500 companies.
I've reviewed the book if you're looking for more context to this quote.
Stock buybacks are artificial efforts to interfere in the so-called “free market” to prop up stock prices. Because they create an artificial demand, they force stock prices above their natural level. With fewer shares in circulation, each remaining share is worth more.
Buybacks don’t create more or better jobs. Money spent on buybacks isn’t invested in new equipment, or research and development, or factories, or wages. It doesn’t build a company. Buybacks don’t grow the American economy.
So why are buybacks so popular with Corporate CEOs?
Because a bigger and bigger portion of CEO pay has been in stocks and stock options, rather than cash. So when share prices go up, executives reap a bonanza. The value of their pay from previous years also rises – in what amounts to a retroactive (and off the books) pay increase on top of their already outrageous compensation.
Is there some amount of shareholder buy-backs that could be seen as the sign of a healthy economy? Wherein "healthy" means still benefiting society via redistribution of wealth to those participating in the labour that created the profits or increase of collective human knowledge. Alternatively, what regulation has been proposed to correct short-sighted buy-backs?