U.S. Council of Economic Advisers member Jared Bernstein highlighted the fact that President Joe Biden considers excessive buybacks by corporations as problematic.
What Happened: Bernstein’s comments come in the wake of renewed tensions between Biden and oil companies as Chevron Corporation CVX announced a $75 billion stock buyback as well as increased its dividend payout, according to its announcement on Wednesday. As a result, shares of the energy giant closed 4.88% higher on Thursday.
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“If you listen to the President's comments on buybacks, this is something he views as problematic when it's excessive. That's one of the reasons why the Inflation Reduction Act had a 1% tax introduction on buybacks. That's in legislation. That's not specifically for one sector over another,” Bernstein said according to a video tweeted by Bloomberg TV.
Chevron is scheduled to report its quarterly earnings on Friday and is expected to post a record $37 billion profit for 2022, over double its return in the previous year, as per analyst estimates compiled by Bloomberg.
“Back when he was vice-president when I worked for him, the President was raising his eyebrows at some of the excessive buybacks, trying to understand if these were really productive for the economy or these were just corporations with more money than they knew what to do with,” Bernstein added.
White House spokesman Abdullah Hasan told Bloomberg in an emailed statement, “For a company that claimed not too long ago that it was ‘working hard’ to increase oil production, handing out $75 billion to executives and wealthy shareholders sure is an odd way to show it.”
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