You will be shocked to learn that, instead of creating jobs and increasing worker pay, much of the money companies are saving due to last year’s atrocious Republican tax cut is going directly into the pocket of corporate executives and their shareholders.
A POLITICO review of data disclosed in SEC filings shows the executives, who often receive most of their compensation in stock, have been profiting handsomely by selling shares since Trump signed the law on Dec. 22 and slashed corporate tax rates to 21 percent. That trend is likely to increase as Wall Street analysts expect buyback activity to accelerate in the coming weeks.
Since the tax cuts were enacted, Oracle Corp. CEO Safra Catz sold $250 million worth of shares in her company — the largest executive payday this year. Product development head Thomas Kurian sold $85 million. The sales came after the company announced a $12 billion share repurchase.
Catz, coincidentally, was on President Donald Trump’s transition team in 2016, and earlier this year was reportedly on the shortlist of candidates to replace H.R. McMaster as national security advisor. (Trump ultimately picked glorified doomsday prepper John Bolton instead.)
Catz wasn’t the only one to get even richer off the tax cut. From Politico:
Mastercard CEO Ajay Banga sold $44.4 million of stock in May, the largest single cash-out by an executive of the company in at least 10 years, months after the company announced a $4 billion buyback of its own stock.
Two days after Eastman Chemical announced it would purchase $2 billion of its own stock, CEO Mark Costa sold 55,000 shares for $5.4 million.
“You’re trying to make a connection where one doesn’t exist,” Mastercard spokesman Seth Eisen told the site, saying that Banga’s stock buyback was preplanned and implying it had nothing to do with the tax cut. “There’s nothing notable about this transaction.” For sure, man.
This shouldn’t come as a surprise; as Splinter noted at the time, some CEOs were upfront about the fact that they weren’t going to do shit with the tax cut except make their companies richer. Others weren’t so honest. AT&T, for example, was eager to score some political points with our hollow-headed president by hollering about bonuses before very quietly announcing that it was laying thousands of people off.
In a speech given on June 11 at the Center for American Progress, Securities and Exchange commissioner Robert Jackson, a Democrat, said that he and his staff investigated just how much executives were cashing in on stock buybacks, and found that in half of the buybacks studied, at least one executive at the company sold shares in the month following the buyback announcement.
“It’s one thing for a corporate board and top executives to decide that a buyback is the right thing to do with the company’s capital,” Jackson said. “It’s another for them to use that decision as an opportunity to pocket some cash at the expense of the shareholders they have a duty to protect, the workers they employ, or the communities they serve.”