In Aftermath of Tax Overhaul, Senate Democrats Crying Foul Over Corporate Buyback Programs
February 24, 2018
Senate Democrats in their weekly radio address last week assailed corporate buyback programs as undercutting any argument of the sincerity of employee investment programs which have been widely reported on in the aftermath of the adoption of the Tax Cuts and Jobs Act. "This is a problem for the middle class. Members of [the Senate Banking Committee] promised that middle-class paychecks would be bulging early in 2018, but instead the CEOs are funneling the tax windfall into buybacks that inflate the value of stocks held by affluent executives and wealthy shareholders," exclaimed Senate Finance Committee Ranking Member Ron Wyden in the Democrats weekly address. Mr. Wyden used the targeted point about buybacks, comparing the $120 million in buybacks in 2018 to the "$5 billion give or take" which companies have given to employees in attempt to smear the highly popular moves made by companies. Senator Sheldon Whitehouse (D-RI) tied the buybacks directly to CEO compensation, noting "We also know that it’s great for CEOs whose compensation very often rides on share prices, so when they jack up their own share price with buybacks it comes right back to them in their executive compensation." The emphasis on essentially making corporate employee investments seem insincere, even going as far as to characterize them as a "scam" is a major focus point of Congressional Democrats as they speed towards the November elections. The focus on buybacks as part of the rhetoric will only heat up as pay ratio prepares to be a widespread disclosure.