The Americans for Financial Reform Education Fund (AFREF), the Institute for Policy Studies, Jobs to Move America, Communications Workers of America, United for Respect, and Take on Wall Street wrote a comment letter to the Office of Management and Budget (OMB) to recommend it be made explicit – in guidance accompanying the final rule – that local and state officials may take responsible action to consider stock buyback expenditures, exorbitant CEO pay, and private equity-driven leveraged buyouts and drastic cost-cutting when awarding federal funds.
News Release: SEC Brings Much-Needed, Long-Overdue Transparency to Stock Buybacks, But Falls Short of Initial Proposal’s Promise
The Securities and Exchange Commission (SEC) today finalized a plan to bring long-overdue transparency to the practice of companies buying back their own stock. However, the final rule weakened key aspects of the initial proposal.
Letters to Regulators: Comment Letter to OMB on Uniform Guidance Relating to Stock Buybacks and Executive Comepensation
AFREF and the Institute for Policy Studies, Global Economy Project led a comment letter to the Office of Management and Budget (OMB) about its uniform guidance, which sets the boundaries around the types of strings states and localities are allowed to attach when they disburse federal funds. This comment letter argues state and local governments should be allowed to give preferential treatment to bidders that commit to make productive investments in their companies and refrain from stock buybacks and excessive executive compensation.
News Release: Commerce Department to Give Companies that Don’t Waste Money on Stock Buybacks A Leg Up in CHIPS Subsidies
Washington, D.C. – Commerce Department guidelines finalized today are a critical step in ensuring that public investment in chip makers is used for productive ends instead of squandered on stock buybacks.
Schumer uttered those words as the Senate was on the brink of passing the Inflation Reduction Act—the compromise reconciliation bill that resulted from prolonged, heated negotiations amongst Democrats. The version that will go to President Biden includes something brand-new in U.S. economic policy: a one percent excise tax on stock buybacks, which reached an astonishing $882 billion last year.
News Release: The President’s Annual Budget Includes Critical Proposals That Would Pave the Way for a Just and Sustainable Economy
This morning, the Biden administration unveiled its annual budget, which includes a tax on households with wealth over $100 million, a 1% tax on stock buybacks, and a proposal for a three-year freeze on corporate executives selling their shares after a buyback.
The CARES Act stimulus continues a pattern of permissive regulation of large corporations that has enabled them to channel their income to providing capital payouts to wealthy shareholders and top executives, rather than support for workers or investment towards the long-term stability and success of the firms.
“The money that is being siphoned off from earnings to increase executive bonuses doesn’t just make wealthy insiders wealthier,” said Heather Slavkin Corzo, senior fellow at Americans for Financial Reform. “It is money that could have been used to invest in making the business more competitive and pay workers living wages.”
Today, 19 groups sent a petition to the SEC urging the Commission to initiate a rulemaking to revise Rule 10b-18 to ban stock buybacks and protect workers.
Testimony: Heather Slavkin Corzo Testifies About Policies To Protect Investors, Increase Transparency, And Promote Worker Rights
The message, for too long, has been that policymakers must choose between policies that protect shareholders’ interest and those that protect workers’ interests. Investors know that economic stability is good for investment outcomes. Over the long-term, economic stability requires broad-based economic growth and shared prosperity.