Posted on 12/08/2017 11:10:51 AM PST by spintreebob
With unemployment low and demand for new homes high, a company like Home Depot could be spending most of its surplus billions on raises for workers or the rollout of new stores.
Instead, it is using $15 billion to buy back shares of its own stock, a move that will reward shareholders including chief executive Craig Menear.
Home Depot’s statement was a reminder that corporate America may have other plans for that cash.
Several companies already have indicated that they will use excess funds to pay off debt, increase dividend payments or repurchase their own shares rather than create new jobs or raise wages. the consensus is that workers will be last in line.
The chain’s founder, Bernie Marcus, was among President Trump’s staunchest supporters during the 2016 campaign, once writing that “the fate of this nation” depended upon his election.
Now, the White House website features a Marcus opinion piece praising the tax cut as “the gift that keeps on giving.” Home Depot last month issued a statement praising the plan for “improving the competitive position of companies so they can create more jobs.”
Several corporations, including AT&T and CVS Health, have publicly touted plans to funnel tax savings into new spending on equipment or hiring. The telecom giant has vowed to boost its annual investment next year by $1 billion, about a 4 percent increase from last year’s $22 billion total.
Over the past five years, companies in the Standard & Poor’s 500-stock index spent $2.6 trillion acquiring their own shares. Information technology companies such as Google’s parent company Alphabet led the way with big banks such as Wells Fargo and Citigroup close behind. Dozens of companies so far this year, including marquee names such as Apple, JPMorgan Chase and Boeing, have spent big on their own stock.
(Excerpt) Read more at washingtonpost.com ...
Then near the bottom of the story, it is mentioned that many other companies have been doing this for the past 5 years and they are not to be criticized because that was not under Trump's tax cut.
At the top we hear how terrible it is that Home Depot is not investing in new stores due to the tax cut.
Oh, by the way, near the bottom it mentions that many other big corporations are investing in new stuff.
Nowhere does it mention that WAPO family member AMAZON will invest big under the Trump Tax Cut and create many new jobs...and maybe those new jobs will be in Home Depot's home town Atlanta.
Is FAKE placement of information fake news?
It’s from the Amazon Post..............
They can buy back all the shares they want.
In the end it’s growth and sales that matter.
As the talent pool and the workforce SHRINK, raises and better paying jobs will come, or are already coming.
What will the Federal Government do?
I hope Trump goes through with the rumored plans to have anti trust laws go after Bezos and split up Amazon.
Home Depot Sanctuary
I was always disgusted how they allow their parking lots to become illegal alien sanctuary’s. Just like San Francisco.
From who and for what price?
Workers salaries are driven by the larger marketplace. With unemployment going down, companies will need to compete for competent workers and that will increase wages.
LOL!
What a bizarre thing for a publicly held corporation to do.
I’m sorry, but what’s funny?
Also obvious author knows nothing
Stock buyback profits many besides corporate insiders
Off the NYSE at market price. They put in a “buy” through whatever brokerage it uses, buys whatever is available up to the amount of available stock or max purchase amount.
This improves the company bottom line, makes the company more competitive and allows it to sell the stock in the future to fund expansion, etc as necessary. The company apparently doesn’t need to expand at this time. Same as Apple and Amazon which are flush with unspent income.
From whomever wishes to sell on the open market...The Stock Market handles this.
When a Corp buys back some of it’s shares, that mean that the Dividends that they pay out will be reduced. That extra profit will be available for expansion. With lower Corp taxes from Trump’s plan, they can open more stores, etc. That means MORE JOBS !!! Why cannot any person in the media understand this???
I NEVER got to spend my GROSS PAYCHECK-—and neither did any of you here on FR. We ONLY got to spend the NET PAYCHECK.
With lower taxes for us, we are , in effect, also getting a raise.
The monumental lack of any media person understanding this makes my blood boil.
There are tens of trillions of dollars that US corporations earn overseas that they have to keep overseas to avoid punative US taxes. That money has to be used somewhere, so it is used to build factories and offices overseas. If the tax rate is less punishing, that money can start to roll back to the states to build factories and offices here. Home Depot may not do much business overseas, so it is using the tax breaks to become a healthier company.
“As the talent pool and the workforce SHRINK, raises and better paying jobs will come, or are already coming.”
You’re trying to explain a dynamic system to people that view everything through a static lens (mainly for political purposes ... they’re smart enough to know better) :-).
“Workers salaries are driven by the larger marketplace. With unemployment going down, companies will need to compete for competent workers and that will increase wages.”
Something that the Compost ignoramuses are unable to grasp.
Get real. Take care of those who don’t do the day to day physical work, while telling the workers they’ll benefit on the back end maybe, with a tiny pittance towards their 401k, is laughable.
It certainly is in the minds of the socialist left.
They think it is wealth redistribution to simply not take people’s wealth from them, what is already theirs.
You’re right.
It’s VERY dynamic, with so many variables.
Though I’d like to see CEO salary dictated more by profits than stock price.
Though BOTH can be manipulated. It is not a perfect system, but it is BY FAR the best.
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