READING INTEL CORP.'S latest annual report,you might think the chipmak-er has returned huge sums of cash to its shareholders through stock buybacks.Since 1990,the report boasts,the company has repurchased from shareholders "2.2 billion shares at a cost of approximately 42 billion." That's a lot of stock-about a third of Intel's total shares outstanding.There's just one problem:Intel had as many shares,split-adjusted,at the end of 2004 as it did in 1990.Much of the cash,it turns out,went to sop up the hundreds of millions of shares Intel was simultaneously issuing for employee stock options.Joseph Osha,a semiconductor stock analyst at Merrill Lynch & Co.,says perhaps half the cash devoted to stock buybacks in general serves as little more than "backdoor compensation" for employees.
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