Many U.S. large public corporations spend their tax cuts on new dividend payout and share buyback.

Jacob Miramar

2018-05-23 09:41:00 Wed ET

Many U.S. large public corporations spend their tax cuts on new dividend payout and share buyback but not on new job creation and R&D innovation. These public corporations channel $1 trillion onshore and offshore cash stockpiles into dividend and share buyback programs. For instance, Apple expects to spend $100 billion cash on share repurchases from mid-2018 to early-2020. Cisco spends $25 billion on share buyback, and Wells Fargo plans $22 billion share purchases. Google also expects to spend about $9 billion on dividend payout and share buyback in order to boost its near-term stock price prospects. Pepsi, AbbVie, and Amgen collectively spend $35 billion on share repurchases for better shareholder value maximization. Visa and eBay plan to initiate similar dividend and share buyback programs over the next couple of years.

Overall, these public corporations seem to view Trump tax cuts are temporary cash windfalls but not permanent cash gains. These companies initiate cash dividends and share repurchases for immediate shareholder gratification. It is thus less clear whether Trump tax cuts serve as permanent income boosts that can help revive real economic output, employment, capital investment, or R&D innovation etc.

 


If any of our AYA Analytica financial health memos (FHM), blog posts, ebooks, newsletters, and notifications etc, or any other form of online content curation, involves potential copyright concerns, please feel free to contact us at service@ayafintech.network so that we can remove relevant content in response to any such request within a reasonable time frame.

Blog+More

Business leaders inspire teams to reach heights of both innovation and profitability with great corporate purpose.

Apple Boston

2020-08-26 10:33:00 Wednesday ET

Business leaders inspire teams to reach heights of both innovation and profitability with great corporate purpose.

Through purposeful leadership, senior managers inspire teams to reach heights of both innovation and profitability with great brand identity and customer lo

+See More

The Federal Reserve proposes softening the Volcker rule that prevents banks from placing risky bets on securities with deposit finance.

James Campbell

2018-05-27 08:33:00 Sunday ET

The Federal Reserve proposes softening the Volcker rule that prevents banks from placing risky bets on securities with deposit finance.

The Federal Reserve proposes softening the Volcker rule that prevents banks from placing risky bets on securities with deposit finance. As part of the po

+See More

Corporate strategies, portfolio choices, and management memes add value and drive business process improvements over time.

Jacob Miramar

2020-08-19 10:32:00 Wednesday ET

Corporate strategies, portfolio choices, and management memes add value and drive business process improvements over time.

Corporate strategies, portfolio choices, and management memes add value and drive business process improvements over time. Andrew Campbell, Jo Whitehead,

+See More

Thomas Piketty frames economic inequality as a global phenomenon.

Apple Boston

2017-01-11 11:38:00 Wednesday ET

Thomas Piketty frames economic inequality as a global phenomenon.

Thomas Piketty's recent new book *Capital in the Twenty-First Century* frames income and wealth inequality now as a global economic phenomenon. When

+See More

Most business organizations should continue to create new value in order to achieve long-run success and sustainable profitability.

Peter Prince

2020-09-10 08:31:00 Thursday ET

Most business organizations should continue to create new value in order to achieve long-run success and sustainable profitability.

Most business organizations should continue to create new value in order to achieve long-run success and sustainable profitability. Todd Zenger (2016)

+See More

President Trump poses new threats to Fed Chair monetary policy independence again.

Apple Boston

2025-06-20 08:27:00 Friday ET

President Trump poses new threats to Fed Chair monetary policy independence again.

President Trump poses new threats to Fed Chair monetary policy independence again. We describe, discuss, and delve into the mainstream reasons, conc

+See More