US-based corporations are making more money than ever before, and they’re putting that money right back into shareholders’ pockets.
One of the reasons the S&P 500 is up more than 10% so far this year is because investors expect dividends — a redistribution of profits from a company to its shareholders — to get bigger.
Dividend payouts to shareholders by companies in the S&P 500 reached a new record in 2023, and that number is projected to grow in 2024, according to data from the CME Group.
The 200 largest publicly traded companies in the United States saw their combined net profits soar to $1.25 trillion in 2022, a gain of 63% from 2018. About 90%, or $1.1 trillion, of that profit went to shareholders through stock buybacks and dividend payments, according to new research from anti-poverty organization Oxfam International.
At the same time, the study found, only 10 of those 200 companies have made public statements in support of paying a living wage.
In contrast, CEO pay — often bolstered by company shares — has soared by nearly a third for those companies since 2018, according to Oxfam. For some of those companies, the average CEO-to-worker pay ratio is now above 1,500 to 1, the nonprofit confederation found.
Critics of buybacks say they allow ultra-wealthy executives to manipulate markets while funneling corporate profits to themselves instead of workers. Preventing or restricting share repurchases, they argue, would free corporate cash to invest more in growth and raise wages.
Read full story at CNN Business.
