Casten Introduces Bill to Ensure Companies Invest in Economy and Workers During COVID-19 Emergency
Downers Grove, IL- Today U.S. Representative Sean Casten (IL-06) introduced a bill to temporarily ban stock buybacks until the impact of Coronavirus (COVID–19) on the American financial system has ended.
Casten said, “As the nation is fighting a pandemic and the economy is on the brink of recession, we must insist that companies invest in the broader economy and support workers instead of enriching their executives and shareholders. Temporarily banning stock buybacks for the duration of the COVID emergency is a commonsense step to ensure that businesses are investing in keeping workers on the payroll, and ensuring employee benefits. Many large banks have acted responsibly and have said they will suspend their stock buybacks because of the pandemic. We must follow their lead to support their workers and the nation.”
Stock buybacks can be used to increase earnings per share and raise the value of the shares, as well as to pay out shareholders. Executive compensation can be tied to stock value, giving them higher incomes. The bill would prevent publicly traded companies from purchasing their own stock during the COVID-19 emergency and for the 120 days after the end of the emergency. The bill allows flexibility to end the temporary ban early if the Securities and Exchange Commission finds that it is in the public interest and notifies Congress.