The #GOPTaxScam: Pink Slips For Thousands Of American Workers And More Than $225 Billion In Corporate Stock Buybacks Going Overwhelmingly To Top Executives And Wealthy Shareholders

March 22, 2018
In the wake of the GOP Tax Scam, major corporations have authorized more than $225 billion in buyback schemes – money that overwhelmingly goes into the pockets of wealthy shareholders and corporate executives. In fact, 84% of stocks are owned by the top ten percent of Americans. It is clear that these share buybacks overwhelmingly help corporate executives and wealthy shareholders – not workers. 
 
Corporate executives are padding their pocketbooks with stock buybacks and laying off American workers:

  • Wells Fargo announced it will close 900 branches despite a $3.4 billion boost from the Republican tax scam. Wells Fargo also announced it will reward corporate executives and wealthy shareholders with a $22 billion share buyback program.
  • Kimberly-Clark announced plans to cut up to 5,500 jobs. Kimberly-Clark also announced it will reward corporate executives and wealthy shareholders with $700-$900 million in share buybacks in 2018.
  • CSX announced plans to lay off thousands of workers. CSX also announced it will reward corporate executives and wealthy shareholders with a $3.5 billion increase in their share buyback program.
  • Harley-Davidson is closing a Kansas City motorcycle assembly plant, resulting in 800 workers losing jobs. Harley Davidson also announced it will reward corporate executives and wealthy shareholders with a $696 million share buyback program.
  • Hess Corporation announced they will lay off hundreds of workers. Hess Corporation also announced it will reward corporate executives and wealthy shareholders with a $1 billion share buyback program.
  • Cardinal Health announced it will lay off 100 workers. Cardinal Health also announced it will reward corporate executives and wealthy shareholders with a $1 billion share buyback program.
  • Pfizer announced it will lay off hundreds of employees. In December, Pfizer announced it will reward corporate executives and wealthy shareholders with a $22 billion share buyback program.
  • This year, Walmart will lay off thousands of workers. But days after Republicans introduced their tax plan outline in September, Walmart announced a new $20 billion share buyback plan to reward corporate executives and wealthy shareholders.
 
Record corporate share buybacks show that the GOP Tax Scam overwhelmingly benefits corporate executives and wealthy shareholders over the middle class. According to multiple analyses, corporate share buybacks are on track to be the “record highest” this year.
 
To date, corporations have spent more than forty-five times as much on buybacks as on one-time bonuses.


Corporation
Share Buyback Amount Announced in 2018 (Millions)
Date
Cisco            
$25,000
14-Feb
$22,572
23-Jan
$15,000
13-Feb
$12,000
1-Feb
AbbVie       
$10,000
15-Feb
$10,000
1-Feb
$8,590
1-Feb
$8,000
27-Feb
Visa             
$7,500
1-Feb
$6,000
14-Feb
$6,000
31-Jan
eBay           
$6,000
1-Feb
$5,000
14-Feb
$5,000
26-Jan
CSX               
$3,500
12-Feb
$3,300
14-Feb
$3,000
28-Feb
$3,000
5-Jan
$2,844
27-Feb
$2,500
23-Jan
$2,000
19-Mar
$2,000
6-Mar
$2,000
6-Feb
$2,000
30-Jan
SiriusXM                          
$2,000
23-Jan
$1,500
20-Feb
$1,500
14-Feb
$1,500
24-Jan
$1,304
22-Feb
$1,250
28-Feb
$1,163
26-Jan
$1,000
20-Mar
$1,000
15-Mar
$1,000
8-Mar
$1,000
7-Mar
$1,000
1-Mar
$1,000
8-Feb
$1,000
7-Feb
Skyworks                        
$1,000
5-Feb
Altria             
$1,000
1-Feb
$1,000
25-Jan
Buybacks <$1 Billion
$35,624
 
TOTAL Corporate Buybacks Authorized in 2018
 
$228.7 Billion


 *Based on closing price on the day share buyback was announced. 

Vox: Corporate Stock Buybacks Are Booming, Thanks To The Republican Tax Cuts. “Right after Republicans in Congress passed their tax bill, lowering tax rates on corporations, companies delivered a very public thank-you: a series of bonus and investment announcements. It was a major PR opportunity for both corporate America and the GOP, meant to show that American businesses were sharing their billions of dollars in tax cut savings with their workers and the broader economy. But over the next few months, the real winners from the corporate tax cut became clear — not workers and consumers, but shareholders. Companies have boosted dividends and stock buybacks. A stock buyback is when a company buys back its own shares from the broader marketplace.” [Vox, 3/22/18]
 
CNBC: Companies Are Putting Tax Savings In The Pockets Of Shareholders. “Share buybacks in 2018 have averaged $4.8 billion a day, double the pace for the same period last year, according to market data firm TrimTabs. That comes following Congress's move to slash the corporate tax rate from the highest-in-the-world 35 percent to 21 percent.” [CNBC, 3/12/18]
 
Reuters: Oil majors give in to investors with share buyback spree. “Since the beginning of year, 11 companies have promised buybacks, with six alone in the past three weeks including Devon Energy (DVN.N), Hess Corp (HES.N) and Noble Energy Inc (NBL.N). In all, companies have committed to buy back about $3.6 billion worth of shares since February.” [Reuters, 3/14/18]
 
David Santschi, Director Of Liquidity Research at TrimTabs: “The feverish buyback activity suggests companies plan to use a hefty chunk of the money they expect to save on taxes to buy back stock." [CNBC, 3/12/18]
 
Ian Winer, Head of Equities at Wedbush Securities: “‘Stock buybacks are purely for the shareholder.” … “It is very difficult to argue buybacks are good for the overall economy or average worker.” [CNN (Money), 3/8/18]
 
David Stockman, Former Reagan Budget Director: “So we need to focus on what's wrong with the exchange rates, what's wrong with corporate America that constantly uses all of its cash flow for stock buybacks, M&A deals, LBOs, leveraged recaps. They're not investing in competitive ability for us to compete in the world market. In fact, business cap-ex in real net terms today is 30% lower than it was in the year 2000. So that's where the problem is, and this tax cut did nothing for it. It's a giant mistake that's going to drive up interest rates and cause, you know, huge windfalls to Wall Street and the 1% and 10% that own the stock. But it's not going to really address the problem.” [CNN Wolf, 3/8/18]
 

Howard Silverblatt, Senior Index Analyst at S&P Dow Jones Indices: “Combined, buybacks and dividends could put the S&P 500 over $1 trillion for total shareholder return this year.” [Press Release, 3/21/18]

This report is available as a pdf here.