Massachusetts Sen. Elizabeth Warren said stock buybacks and cushy executive raises won’t happen on her watch if the federal government bails companies out amid the coronavirus pandemic. And multi-billionaire, Dallas Mavericks owner Mark Cuban agrees with her.
“Let me be clear: We’re not doing no-strings-attached bailouts that enrich shareholders or pay CEO bonuses. Period.” Warren tweeted Tuesday.
New York Rep. Alexandria Ocasio-Cortez and Cuban echoed her sentiments with their own statements on the matter.
“96% of airline profits over the last decade went to buying up their own stocks to juice the price – not raising wages or other investments,” Ocasio-Cortez tweeted. “If there is so much as a DIME of corporate bailout money in the next relief package, it should include a reinstated ban on stock buybacks.”
“No buybacks. Not now, not a year from now, not 20 years from now, not ever because effectively you’re spending taxpayer money to buy back stock and to me that’s just the wrong way to do that,” Cuban said in an interview with CNBC.
The call to place restrictions on stock buybacks come as the Trump Administration is negotiating a trillion dollar stimulus plan, which includes over $50 billion proposed to aid the battered airline industry, reported Markets Insider.
According to Sarah Miller, Executive Director of the American Economic Liberties Project, major airlines spent $40.5 billion of their profits on stock buybacks over the last five years. Now they’re requesting help due to enormous cancellations of flights as Americans are practicing social distancing and international travel is banned.
“Corporate executives rewarded themselves when times were good instead of investing in factories and workers to make the things we need. And policymakers let them. Now that times are bad, these executives are asking for a bailout,” the organization wrote at the conclusion of a tweet thread, which highlighted how much the country’s top 50 companies spent on buybacks.
Several lawmakers – including Reps. Ilhan Omar and Maxine Waters – have proposed varying levels of bailouts to help the American people during this global health crisis. Yet, some stress giant companies should not receive bailouts with no strings attached.
Warren proposed eight conditions that should accompany bailout money for large corporations on Twitter. Among them were maintaining workers on payroll, a $15 minimum wage, the aforementioned prohibition of stock buybacks, paying out dividends and executive bonuses, etc.
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“We’re not writing blank checks to giant corporations. Any taxpayer dollars that go to help big businesses during the coronavirus crisis should come with the following minimum requirements,” Warren wrote before laying out her proposed minimum requirements.
Cuban was also on the same page with Warren with respect to treating workers fairly and compensating them well.
“Whatever we do in a bailout, make sure that every worker gets compensated and is treated equally and that the executives don’t get rewarded extra to stick around because they got nowhere else to go. The government’s taking their risk out of the equation. Let’s treat all workers equally,” Cuban said. “Whatever it is that a company does for their executives, they should be required to proportionally do the same thing for everyone that works for the company. Period. End of story,” Cuban said, saying that was the first step.
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