Intel's dividend is 4.5%, Intel makes $$ buying back stock with debt.
The interesting thing is Intel can keep doing this every couple of years...
Bernanke has signaled lower interest rates at least till late 2014 or early 2015...but I think they are just buying time and lower interest will continue well into the next decade considering the Chinese economy overheating, Eurozone troubles, etc.
The problem I see is that these buybacks get re-issued for executive compensation instead of being retired. A clear case of management acting in their own interest and not in the interest of shareholders. If there is a 70/30 allocation between "stocks being retired/executive compensation", I think there is scope to believe that both interests are fairly aligned. There should be some mechanism for stockholders to be able to put something like this in place.
What you are talking about is INTC buying back more than 300 Million shares and insiders getting options of thousands of shares every 3 months. You might also be stating that some options cost between $15-$23/share. The problem with your thinking of this is that the insiders pay most of the price of the share and so it only will cost a few dollars per share meaning that most of the money can go back into repurchasing more shares along with the price needing to go up to use some of these options. So both of your arguments seem to faulty at best. The 3 reasons being the few amount of thousands of shares, the price needs to go up so that the insiders can use the higher priced options, and the amount the options cost when talking about the hundreds of Millions of shares the company repurchases.
I would argue insiders get hosed on the options cause the use black scholes to price them and they are long dated, which is wrongo. On 5 year options I once computed the premium at about 20% vs a more suitable (mean-reversion) model.....fwiw