Emmanuel Macron denounced this Wednesday the “cynicism” of certain “big companies” that take advantage of record profits to buy back their own shares on the stock market, asking them to pay their employees more. “There is still a bit of cynicism at work, when you have big companies that make such exceptional income that they end up using this money to buy back their own shares,” the head of state said on TF1 and France 2.
It intends to “ask the Government to work on an exceptional contribution” so that “workers can benefit” from this money. In addition to dividends, more and more companies are choosing to buy back their own shares, an operation designed to support the stock price. French CAC 40 companies generated more than 142 billion euros in retained earnings in 2022 on the back of luxury and energy records, benefiting from inflation and the energy crisis, augering a good year for shareholders.
“Finding the Right Technique”
Emmanuel Macron ruled out the solution of taxing superprofits as “we did it with energy companies”. “You have to find the right technique,” he explained, so that the companies that “are in the process of buying their shares (…) distribute more to their employees.” Already in 2022, the CAC 40 companies buy back 23.7 billion euros in shares, according to the financial letter Vernimmen.
TotalEnergies plans to shell out $2bn in the first quarter of 2023 for share buybacks, as much as the group paid in an EU and UK super-profits tax. The Stellantis car group wants to spend €1.5 billion on share buybacks and pay €4.2 billion in dividends, while paying €2 billion in bonuses for its employees. French banks have also been especially generous with their shareholders.
BNP Paribas wants to dedicate 5 billion euros to a share buyback program, the equivalent of half of its record profit of more than 10 billion euros in 2022. Société Générale has decided to dedicate the equivalent of 90% of its net profit to its shareholders through a cash dividend and share repurchase program.
Luxury giant LVMH will distribute €400m to its roughly 39,000 French employees, spend up to €1.5bn on share buybacks and pay some €6bn in dividends to shareholders, including nearly €3bn to the CEO’s family Bernard Arnault. . In the United States, President Joe Biden’s 2024 budget foresees, in particular, “a quadrupling of the tax applied to the repurchase of shares.”
Source: BFM TV
