‘This Was the Plan All Along.”
— First Congressional District candidate Randy “Ironstache” Bryce
By Jessica Corbett
Common Dreams (7/30/18)
While workers’ wages have steadily declined since congressional Republicans and President Donald Trump pushed through massive tax cuts for corporations and wealthy Americans in December, a new Politico analysis finds that rather than using their savings to raise employee pay or create jobs, companies are generating “eye-popping payouts” for executives with a record-breaking stock buyback “bonanza.”
When a public company buys back stock, the value of shares spikes, enabling corporate executives “who often receive most of their compensation in stock” to sell their shares at higher rates and rake in more money.
Politico‘s review of Securities and Exchange Commission (SEC) filings shows that executives “have been profiting handsomely by selling shares” since the tax law took effect, and according to Wall Street experts, “that trend is likely to increase.” As Pat McGurn of the advisory firm Institutional Shareholder Services put it, “It is going to be a parade of eye-popping numbers.”
The report notes that more than a quarter of S&P 500 companies have disclosed plans to return some tax savings to shareholders and that in the first half of 2018 alone, public companies have announced a record $600 billion in buybacks—which, until 1982, were considered stock market manipulation and thus illegal.
For example, as Politico outlines:
“Since the tax cuts were enacted, Oracle Corp. CEO Safra Catz has sold $250 million worth of shares in her company—the largest executive payday this year. Product development head Thomas Kurian sold $85 million. The sales came after the company announced a $12 billion share repurchase.
“Mastercard CEO Ajay Banga sold $44.4 million of stock in May, the largest single cash-out by an executive of the company in at least 10 years, months after the company announced a $4 billion buyback of its own stock.
“Two days after Eastman Chemical announced it would purchase $2 billion of its own stock, CEO Mark Costa sold 55,000 shares for $5.4 million.”
Although some corporations and executives insist that recent buybacks and stock sales have long been planned and aren’t related to the GOP’s “tax scam,” the developments are fulfilling warnings from progressive tax experts that the Republicans’ tax overhaul would line the pockets of the 1% at the expense of working families.
The report, though unsurprising, provoked immediate outrage. Sen. Bernie Sanders (I-Vt.) noted the number of Americans that are living in poverty, or without healthcare or retirement savings, and concluded, “What a disgrace.”
-40 million Americans still live in poverty-30 million have no health insurance-Half of older workers have no retirement savingsAnd what does Trump’s tax plan accomplish? Make the very, very rich much richer. What a disgrace. https://www.politico.com/story/2018/07/30/eye-popping-payouts-for-ceos-follow-trumps-tax-cuts-747649 …
This was the plan all along. These Republicans used our money to give a trillion dollar payout to their CEO buddies—who then turned around and donated to Republican reelection campaigns.
Government should be about serving the public. Not serving yourself.