Institute for Policy Studies Program Director Sarah Anderson appeared on the America’s Work Force Union Podcast to discuss the Executive Excess 2024 report, an annual IPS publication about executive pay at 100 S&P 500 corporations with the lowest median wages.
Anderson explained how this year’s 30th annual report examines the effect of corporate stock buybacks. Over the past five years, these companies have combined to spend about $500 billion on stock buybacks. She believes the money used to purchase stocks should be spent on employees instead of enriching CEOs.
Stock buybacks are a short-term stock price gain that allows executives to cash in on their stock bonuses, Anderson said. She called them a financial scam that inflates the paychecks of executives and siphons money away from employees and long-term investment.
The Securities and Exchange Commission legalized this practice in 1982, and Anderson said it exploded in 2017 after the corporate tax rate was lowered. While several pieces of legislation have been introduced into Congress to make stock buybacks illegal, no such legislation has been passed. She explained how the Biden-Harris Administration has taken steps to combat it, including a 1 percent tax implemented on this practice in the Inflation Reduction Act and how the administration has linked stock buybacks to federal subsidies like the CHIPS Act.
Listen to the show above to hear more about the Executive Excess 2024 report.