(News Bulletin 247) – Minister of Public Accounts Thomas Cazenave is relaunching the idea of ​​further regulating the share buyback programs of listed companies. In March, President Emmanuel Macron had already stepped up to criticize this form of shareholder return.

Share buybacks are once again in the government’s sights. The executive is considering regulating the use of this practice which consists of a listed company acquiring its own shares to support its stock price and therefore indirectly rewarding shareholders who remain invested.

During the publication of their annual results, several large CAC 40 groups announced share buyback programs after revealing record profits. This is the case, for example, of TotalEnergies, LVMH, BNP Paribas, Stellantis and even Axa. According to a count from News Bulletin 247, just under 13 billion euros in share buyback programs were announced by these groups when they published their results or relatively shortly after.

A criticized practice

This is too much for the executive which wishes to regulate this practice… In the midst of the controversy over “superprofits” and more generally over the sharing of value, the government therefore wants to force groups to give more back to their employees. And it is the Minister of Public Accounts, Thomas Cazenave, who is relaunching the idea of ​​a better distribution of corporate profits.

“It can be a common practice, but it is also sometimes a way of taking away a little of the profit that could have been redistributed to employees,” Thomas Cazenave declared Wednesday morning at Sud Radio. The minister also says he is “ready to work” with all political forces who request it in order to integrate amendments to the finance bill (PLF) for 2024, with the aim of moving the subject forward.

The idea of ​​government is not new. Last March, Emmanuel Macron had already stepped up to the plate and had already castigated the “cynicism” of companies which make exceptional profits and buy back their own shares, then evoking an “exceptional contribution” which would be requested from these groups.

The Minister of Economy and Finance, Bruno Le Maire, also took up the subject a few days after Emmanuel Macron’s intervention. “We want large companies that buy back shares, which therefore have the means to do so, to contribute more to the better remuneration of employees,” declared Bruno Le Maire before the senators.

He also explained that, on the method, the government would send a proposal to the social partners so that they “negotiate on this better participation, this better profit-sharing, this wider distribution of shares for large companies which use” these share buybacks.

More than 900 billion dollars in the United States

In the United States, a country where share buybacks are commonplace due to favorable taxation, Joe Biden and his administration do not hesitate to criticize this form of shareholder return. At the start of the year, the American president called for quadrupling the tax on share buybacks, to increase the tax rate from 1% to 4%.

According to Janus Henderson, who compiled the announcements of 1,200 large global companies, share buybacks in the United States amounted to $932.43 billion in 2022 compared to $758.4 billion in 2021, an increase of 19%.