Shortly before the Senate adjourned for the August recess, Senate Banking Committee Ranking Member Sherrod Brown (D-OH) sent a message to the wide-open field of fellow Democrats vying for the party’s nomination for President for use during August campaigning – make the “dignity of work” a central campaign theme. To jump start the discussion, Mr. Brown introduced a bill, the Stock Buyback Reform and Worker Dividend Act (S. 2391) which would require public companies to pay every worker $1 for every $1 million in increased shareholder returns generated from stock buybacks, increases in dividend payments, and special dividends. All non-executive employees – including independent contractors, part-time employees, foreign employees and employees of subsidiaries would be eligible for the “dignity of work” payment. According to a report an article on the bill by Roll Call, in Apple Inc.’s case, the bill would translate the $74.2 billion the company has repurchased into a $74,200 payment per worker.
Even though they are primarily the result of capital allocation decisions, stock buybacks have long been a primary target of Democrats, especially following the 2017 adoption of the “Tax Cuts and Jobs Act.” Democrats characterized the massive tax reform bill as benefiting only corporations and the wealthy. With the addition of the worker benefits, Sen. Brown’s “Dignity of Work” bill aligns much more closely with the massive push to turn corporations away from the shareholder-centric focus into an operating manner which considers the impact on all stakeholders. Several major Democratic candidates for President, including Senator Elizabeth Warren (D-MA) have already introduced legislation aiming to give employee representation on boards – mirroring elements seen overseas like in Germany.
This week House Financial Services Committee Chair Maxine Waters unveiled her agenda for the fall, indicating that stock buybacks would be one of the Committee's focus areas.