With the pension reform passed by the tongs, Emmanuel Macron concentrated the discontent of the majority of the French, the trade unions and the opposition in Parliament. After meeting him on Wednesday, March 22nd, they could be joined by new demonstrators: the big corporations. And with good reason, the president urged those who make exceptional profits to pay a larger share to their employees.
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“There is still a bit of irony at work, however, when we have large companies making such extraordinary income that they end up using that money to buy back their own shares.”, denounced. In addition to dividend payments, these “share buybacks” are a financial mechanism that allows companies – generally the wealthiest – to destroy the shares they have bought, reducing the number of securities in circulation and thus increasing their value.
sequel after announcement
France’s CAC 40 companies generated more than €142 billion in cumulative profits in 2022 thanks to records in the luxury and energy sectors, benefiting from inflation and the energy crisis – which bodes well for shareholders.
Large companies with more than 5,000 employees
To combat this phenomenon, the head of state Ask the government to work on an extraordinary contribution. in order to ‘Workers can benefit’ from this aphid.
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Will it be about taxing ultra-profitable corporations, a longstanding left-wing claim? Emmanuel Macron rejected the idea, without giving further details. You have to find the right technique.He explained that the companies that They are buying their shares […] distribute more to their employees.”.
Bruno Le Maire, a few hours later in the Senate to ask questions to the government, presented some details: We want companies that buy back shares to contribute to better employee compensation. We could consider doubling the payments for participation, profit sharing, or tax-deductible bonuses. »
sequel after announcement
What companies are we talking about? Large companies with more than 5,000 employees are buying back shares.The Minister of Economy replied. In any way? A proposal for the social partners to negotiate a better partnership and profit sharing. »
TotalEnergies, Stellantis, LVMH involved
The presidential proposal comes as share buybacks are ramping up. In 2022, CAC 40 companies bought back shares worth €23.7 billion, according to the Vernimmen financial letter.
TotalEnergies expects to shell out $2 billion in the first quarter of 2023 for these acquisitions, the same amount the group paid under a major corporate tax in the European Union and the United Kingdom. Car group Stellantis wants to spend 1.5 billion in share buybacks and pay 4.2 billion euros in dividends, while paying 2 billion in bonuses to its employees.
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French banks have also been particularly generous with their shareholders. BNP Paribas wants to allocate 5 billion euros to a share buyback program, equivalent to half of its record profit of more than 10 billion euros in 2022. Societe Generale has decided to allocate the equivalent of 90% of its net profit to its shareholders via cash dividends and a share buyback program .
Luxury giant LVMH will distribute 400 million euros to its nearly 39,000 French employees, spend up to 1.5 billion euros in share buybacks and pay around 6 billion euros in dividends to shareholders, including nearly 3 billion that will go to the president’s family. Executive Bernard Arnault.