FOR IMMEDIATE RELEASE
January 27, 2023
Chevron Mega-Stock Buybacks Program Shows Need for Tougher Rules
Climate Profiteer Prioritizes Juicing Share Price Not Clean Energy Transition
Washington, D.C. – The announcement that Chevron will spend $75 billion on stock buybacks underscores the urgency of reinforcing a measure Congress created last year to penalize companies that engage in a financial practice that amplifies rampant wealth inequality, and in this case boosts the bottom line of a climate-harming industry.
“Chevron is spending an unconscionable amount of money on a gimmick that artificially boosts share prices and therefore the payoff for already wealthy executives whose pay is linked to their company’s stock,” said Natalia Renta, senior policy counsel for corporate governance and power at Americans for Financial Reform. “If Big Oil’s mostly empty claims that they care about the climate mean anything, they need to be investing that cash in a clean energy transition that is fair to their workers and customers.”
The Inflation Reduction Act of 2022 included a first-of-its-kind 1 percent tax on stock buybacks, which came into effect on January 1, 2023. Senate Finance Committee Chair Ron Wyden, who rightly condemned Chevron’s announcement, last year proposed legislation, the Taxing Big Oil Profiteers Act, which would raise the tax on oil companies’ stock buybacks to 25 percent.
“Although the Inflation Reduction Act’s tax on stock buybacks was a step in the right direction, there are already ideas on the table about what more can be done to rein in this practice,” said Renta. “Congress should pass the Reward Work Act to close the loophole created by the Reagan-era Securities and Exchange Commission in 1982, which abandoned the correct premise that buybacks manipulate the market and opened the floodgates to the wasteful and self-serving practice of open-market repurchases.”
Read our blog post on the topic for more policy changes that would rein in stock buybacks. Congress, the Securities and Exchange Commission, and the Biden administration all have tools at their disposal.