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The proposal, dubbed the 'Stock Buyback Reform and Worker Dividend Act' aims to do two things, first, it would curb stock buybacks and second, it would create a so-called worker dividend paid to employees. The latter would be equal to $1 for every $1 million spent on stock buybacks, dividend increases and special dividends.
“Wall Street is obsessed with shareholder equity, but workers have equity in a company, too – it’s called sweat equity, and it’s time workers are rewarded for it,” Brown, who is a ranking member of the Senate Finance Committee, said in a statement. "My proposal is simple: if corporations want to transfer wealth to Wall Street, workers have to get a proportionate share of the pie.”
Brown took particular aim at JPMorgan in prepared remarks, saying a bank teller at the company would be owed a worker dividend of $20,000.
Walmart was also called out for spending $8 billion on stock buybacks
Companies repurchased a record amount of their own shares from investors last year.
So far this year those numbers have slowed to $205.8 billion in the first quarter, down from $223 billion in the fourth quarter, according to The Wall Street Journal.
By repurchasing their own shares, companies are lowering their overall share count, which can increase earnings per share. Brown referred to the practice as corporations 'juicing' their own stock prices.
Critics say investors should instead use that money to reinvest in workers.
Brown said he declined to outright ban stock buybacks because companies would find “other ways to enrich shareholders.”
Brown created a calculator on his website whereby employees can figure out what their share of the worker dividend would be.
The Ohio senator is not the first lawmaker to take aim at corporate stock buybacks. Senate Minority Leader Chuck Schumer, D-N.Y., Vermont Sen. Bernie Sanders and Florida Sen. Marco Rubio are among others who have taken aim at the practice, alleging it enriches the already wealthy at the expense of American workers.