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President Trump announced on Wednesday during a coronavirus task force briefing that there will be a ban on corporate stock buybacks for companies receiving federal assistance in response to the pandemic. The ban will last through the term of the loan plus an additional year.
“We want them to use the money for the companies and the planes or whatever they may be helping to get over this rough patch,” Trump said.
He also said there would be tough limits imposed on executive compensation.
“They need the money, they’re going to sort of have to make things work, because we’re interested in the workers," he said. "We’re interested in the companies because that’s really what fuels the workers in those great jobs”
In the fourth quarter of 2019 alone, companies in the S&P 500 spent $181.6 billion in repurchasing their shares, according to research from S&P Dow Jones Indices. Buybacks for the full year of 2019 were $728.7 billion, down 9.6 percent from the record $806.4 billion set in 2018.
The $2.2 trillion coronavirus relief package is expected to be voted on by the Senate Wednesday night.