Sunday, 3 November 2024
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President Bidden calls out for the stock buybacks

Hugh Johnston, the chief financial officer of PepsiCo, predicts that if proposals to raise taxes on stock buybacks become law, more money will be allocated to dividends.

Although he didn’t “see why taxing buybacks is a good idea,” he said on Thursday to CNBC that such laws are made in Washington, DC.

Expects higher Dividends

According to Johnston, if any of the ideas to implement the buyback excise tax are implemented, “you’ll probably see more money go into dividends and less money go into share buybacks over time.”

President Joe Biden singled out large Wall Street buybacks during his State of the Union speech on Tuesday, calling for a quadrupling of the current 1% tax in addition to other calls to tax millionaires even more.

  • CFO of PepsiCo, predicts that if stock buybacks increase, more money will be allocated to dividends.
  • President Joe Biden calling for a quadrupling of the current 1% tax.
  • Exxon Mobil said in December that it will spend $15 billion on buybacks in 2022 and then $50 billion through 2024.

Furthermore, Biden linked the criticism of buybacks primarily to large oil firms, who have made enormous profits in the context of the competitive energy market.

The White House expressed some annoyance with Chevron last month after it announced a $75 billion stock buyback program and hiked its quarterly dividend by 6% to $1.51 per share, despite its pleas for domestic oil firms to increase output to counteract supply constraints.

At the time, White House spokesman Abdullah Hasan remarked, “Giving $75 billion to executives and affluent shareholders really seems an unusual way to show it for a firm that stated not so long ago that it was ‘working hard’ to enhance oil output.

Exxon Mobil said in December that it will spend $15 billion on buybacks in 2022 and then $50 billion through 2024.

Tech juggernauts including Alphabet, Apple, Microsoft, and Meta, who were among the companies starting the largest buybacks in 2022, are among the other significant companies drawing attention to their buybacks from the previous year.

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