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I wasn't sure how to phrase the title more precisely, so I welcome suggestions or edits.

Companies spend 65% of their profits on buying back their shares because CEOs are incentivised to jack up the share price of their stocks through hefty bonuses.

Here's my question: often when I'm writing a sentence like the above, I end up in this awkward position where I've got two facts (excuse my probable abuse of terminology here):

  1. CEOs are being incentivised.
  2. Share prices are going up.

and my explanation/justification is:

  1. Hefty bonuses.

From the context, it's almost clear that hefty bonuses are a justification for 1 and not an explanation of 2.

But how do I make this very clear without verbiage? After I've written the first two facts, I feel I've laid a rhetorical trap for myself. What are my escape routes?

PS. I wasn't sure about how to best phrase the title or which tags to choose, so please feel free to suggest or edit.

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    Strictly speaking, your question is not about grammar. It is a perfectly proper and understandable sentence. And if this is your example of a long sentence, I have to say that you are not even trying. It's fine as it is. But my advice can be given in one word: 'signposts'. A complex sentence is like a route through a dense town. So if, right at the start of my journey, I see "The reason why...", I immediately know where the streets are taking me. I know to look out for a "because". So I am a more relaxed on the my journey. I don't worry "where do I go next"?
    – Tuffy
    Mar 21, 2021 at 9:13
  • @Tuffy I'm interested to see what others think as well but my sentence feels a bit clunky/disjointed. With hindsight, I want to move "through hefty bonuses" to just before "to jack up". I really love your analogy with the signposts but I find the road far ahead difficult to anticipate.
    – piccolo
    Mar 21, 2021 at 9:43
  • Not saying my sentence is better, I only want to know if my interpretation is correct. I'm a total numbskull where shares and investments are concerned. “Up to 65% of profits are reinvested in company shares by CEOs who are incentivized to jack up the share price on account of being rewarded hefty bonuses.” FWIW I left the expressions "jack up", "incentivized" and "hefty", which I do not commonly use in my everyday conversation, precisely because anything remotely financial intimidates me.
    – Mari-Lou A
    Mar 27, 2021 at 6:50
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    You are right in your inclination to move the prepositional phrase through hefty bonuses to follow the verb it relates to: "Companies spend 65% of their profits on buying back their shares because CEOs are incentivised through hefty bonuses to jack up the share price of their stocks.". The original version suffers from attachment ambiguity : exploredatabase.com/2020/03/…
    – Shoe
    Mar 27, 2021 at 7:41
  • When a company bases its executive bonuses on the value of its stock, CEOs are motivated to boost share values through stock buy-back programs. Indeed, as much as 65 percent of a company's profits are directed to repurchasing stock shares in order to increase share prices. Mar 28, 2021 at 5:25

4 Answers 4

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The sentence you've written is both overstuffed and underdefined. It tries to make an argument that could easily fill at least a paragraph; but it omits crucial details that would give the argument force and clarity, and it creates needless ambiguity in its placement of one particular phrase.

In reading the sentence

Companies spend 65% of their profits on buying back their shares because CEOs are incentivised to jack up the share price of their stocks through hefty bonuses.

my first thought is, what companies spend 65% of their profits on share buybacks? Is this a computed average figure for all publicly traded companies in a certain country or region during a certain period? If so, where did the figure come from, what part of the world does it refer to, and what period does it cover? If not, what does the figure represent, and what is its source? Also, are you talking here about net profits, gross profits, or something else?

Answering those questions satisfactorily would take at least one complete sentence, even if you limited yourself to cursory coverage of each question. For example,

During the three-year period from January 2018 to December 2020, publicly traded companies in the United States spent, on average, 65% of their net profits on stock buybacks, according to SEC filing data.

Once you've established where the 65% statistic came from, what companies it covers, and for what period, you can move on to the next step in the argument: the assertion that the reason companies buy back stock shares is to raise the price of the shares. It is perfectly reasonable to say this in a separate sentence:

The main purpose of such buybacks is to increase the share price of a company's stock.

Now you need to explain why achieving higher share prices is so important to CEOs. The original wording on this point—"CEOs are incentivized to jack up the share price of their stocks through hefty bonuses"—is somewhat garbled, as it attaches "through hefty bonuses" to "jack up the share price of their stocks" instead of to "incentivized" (which is the more logical connection to make). That is, you presumably want to say that CEOs are incentivized, through bonuses that are tied to the stock share price, to do everything they can to ensure a high share price when bonus time comes around—and you don't want to say that CEOs are incentivized to use their bonuses to jack up the share price of their stocks.

To express this idea clearly, you would do well to dedicate a third sentence to it. This would also be an opportune time to indicate how widespread this phenomenon is—by mentioning whether "some," "many," "most," or "all" CEOs have their bonuses tied to share price in this way—and to note the method used to determine the stock price value for purposes of calculating CEO bonuses. For example,

But the reason CEOs tend to be so interested in securing a high share price for their company's stock is that the vast majority of them receive bonuses on the basis of the company's average share price at the end of each quarter of the fiscal year.

That would give you the following revision of the original sentence:

During the three-year period from January 2018 to December 2020, publicly traded companies in the United States spent, on average, 65% of their net profits on stock buybacks, according to SEC filing data. The main purpose of such buybacks is to increase the share price of a company's stock. But the reason CEOs tend to be so interested in securing a high share price for their company's stock is that the vast majority of them receive bonuses on the basis of the company's average share price at the end of each quarter of the fiscal year.

An alternative approach would be get rid of (on the one hand) the unsupported statistical detail about 65% of companies' profits and (on the other hand) the unmodified references to "companies" and "CEOs," which read as if you are inviting readers to assume that you are talking about all companies and all CEOs, and instead speak in broad but carefully hedged generalities. You could manage this in a single sentence, but I see no reason not to use two:

Many companies spend a large portion of their profits on stock share buybacks. Because executive bonuses are frequently tied to the share price of the company's stock, CEOs may have a powerful incentive to keep that price high.


To sum up, the only syntactical problem with your original sentence is the ambiguity resulting from the end-of-sentence placement of the phrase "through hefty bonuses"—which you could cure by moving it to follow immediately after "incentivised." But the larger problem with the sentence isn't that it is long, but rather that it is far too short and incomplete to persuasively present the argument you seem to want it to make.

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    I must confess to being a fan of your superb answering on this site. You've mentioned on some other post here that you used to write for some newspaper in the past, right? Could you please talk a bit about your journalistic career (in nutshell, considering the off-topic nature of the request)? This would be of great benefit to an aspiring journalist. Thanks for your great answers and for being a valuable part of this great forum! @Sven Yargs.
    – user405662
    Mar 27, 2021 at 11:21
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    @user405662: Although I appreciate your kind words, I'm not a professional writer. I'm a copy editor—a job in which my central concern is to represent the interests of future readers of the manuscript I am working on: asking the questions they might have about the logic and argument that the author makes, trying to maximize the clarity and naturalness of the wording, and preserving (to the extent possible) the continuity of the author's style. Paradoxically, the great disadvantage that all authors face is that they know what they are trying to say. This knowledge makes it difficult for them...
    – Sven Yargs
    Mar 27, 2021 at 18:13
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    ...to switch over to the role of a reader, who has only the text on the page to go on. An editor's most important task is therefore to serve as an interested and sympathetic but independent reader who can see what isn't there—what the author hasn't said fully or unambiguously or logically or smoothly. Editing consists largely of what EL&U users refer to as "opinion-based" decisions—including recognizing instances where applying some formal rule would worsen the writing. But the key to good editing, I think, is to understand that one's primary duty is to the reader, not to the author.
    – Sven Yargs
    Mar 27, 2021 at 18:13
  • Hi @Sven Yargs I'm also now a convert to your fandom. I have a closed question directly related to your answer and a more broad question. Short Q : In your suggested edit: "Many companies spend a large portion of their profits on stock share buybacks." You've replaced my 'buying back' with 'buybacks' is that because using more than one verb in a sentence reads clunkier. Long Q : I'm a native speaker but have you got any tips or resources for how to write better beyond stock grammar for the person like me that can be grammatically correct but stylistically and expressively deficient.
    – piccolo
    Mar 27, 2021 at 19:14
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    @piccolo: There is no objective reason to consistently prefer "buybacks" to "buying back" in head-to-head competition. Sometimes one will sound better than the other, and sometimes the other will. A lot of writing is simply a matter of listening to the rhythm and music of the words, rather than of mechanically applying rules that we might wish could reliably produce optimum results in all contexts. Thinking of language as music may help you recognize the oddness of the task of expressing ideas effectively—and the importance of using your ears as well as your analytical powers in the effort.
    – Sven Yargs
    Mar 27, 2021 at 19:53
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As another fan of @SvenYargs's masterful answers I'm hesitant to offer this alternative, but am posting in case this answer potentially offers any additional insight. I've written this as an iterative series of minor modifications accompanied by descriptions of each change. This is for demonstrative purposes and despite the facts that it leads to a few unwieldy interim constructions and that in practice the process would occur more organically and in fewer steps.

I've also deliberately maintained the single-sentence structure in response to the question of how to "make this...clear without verbiage" (which I take to mean as briefly as possible), although ultimately I agree with @SvenYargs that this particular set of factual and causal assertions would likely (depending on context) benefit from more extended discussion/support.

The original:

Companies spend 65% of their profits on buying back their shares because CEOs are incentivised to jack up the share price of their stocks through hefty bonuses.

Placing the cause before the effect:

Because CEOs are incentivised to jack up the share price of their stocks through hefty bonuses, companies spend 65% of their profits on buying back their shares.

Disambiguating the incentive mechanism:

Because CEOs are incentivised, through hefty bonuses, to jack up the share price of their stocks, companies spend 65% of their profits on buying back their shares.

Making the incentive mechanism the subject of the sentence (and working around "incentivise," which is sometimes maligned as business jargon):

Hefty bonuses produce incentives for CEOs to jack up the share price of their stocks; companies spend 65% of their profits on buying back their shares.

Clarifying the relationship between buybacks and stock prices:

Hefty bonuses produce incentives for CEOs to jack up the share price of their stocks by buying back shares, on which companies spend 65% of their profits.

Removing informal and redundant phrases:

Hefty bonuses produce incentives for CEOs to inflate stock price by buying back shares, on which companies spend 65% of profits.

Clarifying the relationship between bonuses and stock price:

Tying hefty CEO bonuses to share value produces an incentive to inflate stock price through buybacks, on which companies spend 65% of profits.

Removing terms that might be seen as subjective:

Tying CEO bonuses to share value produces an incentive to increase stock price through buybacks, on which companies spend 65% of profits.

I again concur with @SvenYargs that there are several implicit and insufficiently demonstrated factual assertions here. It's preferable, of course, to do the work of supporting those assertions—but, in a pinch, one can also hedge. Hedging also has the "advantage" of being more portable, i.e. it can be applied in a wide variety of situations. The hedged, slightly wordier, version:

Tying CEO bonuses to share value can produce an incentive to increase stock price through buybacks, on which some companies have recently spent nearly 65% of profits.


Edit: @Xanne also makes some good points that the sentence in question is a mixture of factual assertions and logical conclusions, and that the source of funds used for buybacks are, from an accounting perspective, probably retained earnings or cash reserves, which are technically different than "profits" (although the latter are of course the primary source of the former).

However, this perfectly valid critique and those offered by @SvenYargs don't ultimately consider that such critiques may very well be addressed in the broader context of OP's full text (which we could reasonably assume exists), while the question posed here is merely about a single sentence.
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  • Thank you very much for your invaluable contribution to my OP. Could you explain how the last revision is a hedged alteration of the penultimate revision. @cpit
    – piccolo
    Mar 31, 2021 at 21:34
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    @piccolo sure: "... can produce an incentive..." is an implicit hedge in that it leaves open the idea that bonuses might also not produce such an incentive. "... some companies..." is qualifying the statement, since not all companies spend 65% of profits on buybacks; "... have recently spent is basically the same, since not every company every year spends 65% on buybacks; and nearly is pretty self-explanatory, but just makes it more clear you're not saying 65% is an exact figure for every/any company in every/any year.
    – cpit
    Apr 1, 2021 at 22:24
  • Perhaps "qualifications" might have been a more precise term for these than "hedges," although I think in this case these qualifications also function as hedges.
    – cpit
    Apr 1, 2021 at 22:26
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Companies spend 65% of their profits on buying back their shares because CEOs are incentivised to jack up the share price of their stocks through hefty bonuses.

I would change this to Companies spend 65% of their profits on buying back their shares because hefty bonuses incentivize CEOs to jack up the share price of their stocks.

But the real problem is that a company buys its shares back with cash, not with profits. Besides the questions about who the companies included are, there’s the question of the nature of these incentives (is there a bonus for market capitalization or share price regardless of the number of shares outstanding?) and whether CEOs with such incentives were more likely than those without such incentives to buy back shares.

When you write something like this you need to distinguish between reporting facts and drawing conclusions about causes.

I too am a fan of Sven Yargs and don’t disagree with anything he wrote.

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The term of art is that you are "Burying the lead". The final idea is your biggest claim, your main point is actually the last word. It may work to get a reader to turn the page but not as a succinct display of a claim.

Just like a good lecture or other presentation you need to organize a sentence to get the message across properly. For that the ideas need to be in the right order; claims and supporting evidence. In a presentation you could start by talking about companies and their profits but there is no time to do that here.

You should try to turn the sentence around and describe your last idea with the first ones.

"CEO's are getting large bonuses from their share prices going up which happens when they spend their profits, 65% so far, on buying back their shares."

"CEO's are getting large bonuses from their share prices going up which is enough incentive to spend their profits, 65% so far, on buying back their shares."

"CEO's get large bonuses when their share prices go up which happens when they spend their profits, 65% so far, on buying back their shares."

You can add your opinion along the way to describe the propriety if not the legality of what they are doing.

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