Nell Minow appeared on the Motley Fool Money podcast this week to discuss buybacks, the expected veto from President Biden that will reinstate the DOL/EBSA ESG rule, and the Oscars.
Category: buybacks
Nell Minow on Stock Buybacks in Esquire
VEA Vice Chair Nell Minow is quoted in Jack Holmes’ piece about buybacks in Esquire: Executives benefit to the tune of moral hazard. Not only are options and awards a major portion of any top executive’s compensation, they often earn bonuses triggered by short-term performance. They’ve made a significant bet that the share price will…
Marathon Oil Post’s $3.6 Billion in Profits Off the Backs of American Consumers, Executives Plan to Give At Least $1.8 Billion to Wealthy Shareholders – Accountable US
We note that the $1.8 billion goes to non-wealthy shareholders, too, like working people who are pension plan participants. That does not mean that this is optimal from any perspective, given the trillion dollar subsidies for oil companies and the externalization of the costs of environmental degradation. Today, Marathon Oil formally reported its profits from…
Why the 1 Percent Buyback Tax Doesn’t Scare Investors – The New York Times
The fact that Republicans hope the new buyback tax will raise revenue and Democrats hope it will change behavior suggests that both will be disappointed by this provision in the new legislation. The U.S. government estimates that it will raise $74 billion over nine years from the tax, which comes into force at the start…
SEC’s New Restrictions on Insider Stock Transactions and Buybacks
The issue of stock trades by corporate executives, including buybacks, which can be timed around information only known to insiders, has been an issue for investors, and we are pleased to see the SEC move to tighten restrictions. The SEC’s proposed rule would require corporate directors or officers to wait 120 days before trading after…
Here We Go Again: Banks Plan Buybacks
“We have so much capital, we cannot use it,” Jamie Dimon of JPMorgan quipped to investors. The bank’s cash pile has doubled over the past year, to more than $500 billion. It’s a similar story at other banks, and now that they’ve been cleared by regulators to resume share buybacks, “we’re going to be aggressively…
The Dangers of Buybacks: Mitigating Common Pitfalls
Sarah Keohane Williamson, Ariel Fromer Babcock, and Allen He, FCLT Global say that the dangers of stock buyback programs include executive compensation gaming, employee trading, contribution to income inequality, excess leverage, and poor timing of investment decisions. Buybacks are often associated with long-term value-destroying behaviors, including several means of personal gain and enrichment, poor timing…
Opinion | Stock buybacks and a shaky economy – The Washington Post
There are two main channels for funneling profits to shareholders: dividends and stock repurchases. From 2000 to 2017, dividends and stock buybacks totaled about $10 trillion, finance professors Kathleen Kahle of the University of Arizona and René M. Stulz of Ohio State University report in a just-released working paper by the National Bureau of Economic…
Boeing’s crisis is largely of its own making – The Washington Post
“Wall Street got Boeing’s cash; Main Street gets the relief bill.” If you want an example of how keeping Wall Street happy can undermine your business, look at Boeing. If you’re also interested in seeing how already-well-paid corporate directors can get a raise while presiding over a horrendous mess that helped lead a company to…
Some Companies Seeking Bailouts Had Piles of Cash, Then Spent It – The New York Times
Still, the crisis has exposed the potential failings of a strategy embraced by many big companies: aligning their priorities with the interests of shareholders, many of whom are narrowly focused on the performance of a company’s shares. Shareholders, wanting stock prices to go higher, pushed management to use up cash on buybacks and dividends. And…
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