While the dollar value of buybacks hit records, they’ve decreased as a percentage of market value amid the record bull market. Repurchases in the 12 months ending in September 2018 equaled 2.72 percent of total market cap, well below the 4.31 percent in 2007.
Among the presidential contenders, Booker has pushed to require publicly traded companies that use profits for stock buybacks to pay a similar amount to employees as a “worker dividend.” Warren has advocated repealing a Securities and Exchange Commission rule that makes it easier for companies to make stock buybacks. It also would end corporations’ ability to repurchase stocks on the open market.
Sanders spokesman Josh Miller-Lewis said no further details are available on the Schumer-Sanders proposal, including when it may be introduced or which types of corporations would be subject to the buyback limits.
In their opinion piece, the senators said stock buybacks fundamentally benefit the wealthy, who are more likely to be shareholders or executives who are compensated through stock-based pay.
“It’s no coincidence that at the same time that corporate stock buybacks and dividends have reached record highs, the median wages of average workers have remained relatively stagnant,” they said. “Far too many workers have watched corporate executives cash in on corporate stock buybacks while they get handed a pink slip.”
This article provided by Bloomberg News.