The eighties brought us permed bangs, acid wash jeans, and Gordon Gecko’s “greed is good” mantra. So it’s not surprising that in 1982, among other bad ideas, the Securities and Exchange Commission put into effect something called Rule 10b-18, which granted a “safe harbor” (read: free pass) to company executives who wanted to buy back their own stock to raise its price. The SEC promised it would no longer accuse executives who bought back their own stock of market manipulation, rewarding corporate greed.

What exactly is a stock buyback? Stock “buybacks” are when companies buy back their own stock from shareholders on the open market. When a share of stock is bought back, the company reduces the number of shares left in the market, which raises the price of remaining shares.

Company executives have every incentive to buy back stocks, since most of their compensation today is paid in the form of stock, and a higher stock price makes them personally richer. Executives push companies to buy back billions of dollars of their own stock, juice share prices, and pass on cash to themselves and wealthy shareholders. (If you’re curious about the mechanics, check out this short visualization of how it works, or Rep. Alexandria Ocasio-Cortez’s explainer at a recent House hearing.)

Over the last 15 years, 94 percent of corporate profits have gone to shareholders in the form of buybacks and dividends, instead of to workers and their families.

Stock buybacks benefit people who already have wealth, and those people are more likely to be White, and more likely to be male. Most Americans are not shareholders. Less than half of American households own stock, either directly or through a retirement account. But 94 percent of households in the top 1% own stock.

Even fewer Americans of color are included in the term shareholders. While 60 percent of white households have retirement accounts or hold direct equity in the stock market, only 34 percent of Black households, and 30 percent of Latinx households, have retirement accounts.