Subject: Re: OT AZO and Stock Compensation Cost
If I understand correctly, it could be viewed this way:
In effect, all the original 1998 shareholders were bought out, and the company remaining after that cash left the building was entirely given to the employees. It is all now owned either by the employees, or the people to whom the employees have sold? Ick.

That's one way of looking at it. But presumably some of the shares repurchased along the way were shares issued to employees as stock-based compensation along the way. So, in practice, while some shares would have been recycled through the market (perhaps even repeatedly), presumably some of the original 1998 shareholders simply held on (or people who purchased their shares from those original shareholders held on). It looks like, in the last 25 years, the price of AutoZone stock is up 100X (give or take a little, depending on the specific date you look at in October 1998). Could AutoZone have done even better if it had not issued shares as stock-based compensation? Maybe so. But according to the linked post, even with that "capital 'leakage,'" the "[s]hares outstanding fell 8.2% per year, on average"; "[t]he average repurchase price is 91% lower than AutoZone's current $2,500 per share price"; and "AutoZone has compounded at 19% per year since 1998 despite slight multiple contraction (21x to 17x, 0.8% per year)." I find that hard to criticize.

Don't get me wrong: I'm a big fan of the fact that Berkshire's share repurchases actually reduce the number of shares outstanding one-for-one. But I'd be willing to live with a little capital "leakage" if it meant that each one of my B shares was worth $33,500 (and each A share was worth $51M) in 25 years.