Billionaire entrepreneur Mark Cuban urges that companies that receive federal assistance in response to the coronavirus should be prevented from buying back stock ever again.
“Not now. Not a year from now. Not 20 years from now. Not ever,” Cuban told CNBC.
“Because effectively you’re spending taxpayer money to buyback stock and to me that’s just the wrong way to do that.”
He also said, “Whatever we do in a bailout, make sure that every worker is compensated and treated equally — in that the executives don’t get rewarded extra to stick around because they got nowhere else to go.”
Cuban spoke as Washington proposed a rescue package for U.S. airliens of $50 billion in loans, but no grants as the industry had requested, to help address the financial impact from the deepening coronavirus crisis, Reuters said.
The Trump administration's lending proposal would require airlines to maintain a certain amount of service and limit increases in executive compensation until the loans are repaid.
The largest U.S. airlines -- American Airlines Group Inc , Delta Air Lines Inc and United Airlines Holdings Inc -- are drastically reducing flights, parking jets, raising capital and cutting costs including executive pay as part of measures to save cash as air travel demand takes an unprecedented downturn.
But the industry says government assistance is also needed to avoid collapse, airlines are working behind the scenes to convince lawmakers to still make a significant chunk of it in grants.
Their request for aid has faced pushback from some lawmakers demanding that any government package include protections on employees and a ban on share buybacks.
The top five U.S. airlines spent around $44 billion in share buybacks between 2014 and 2019, according to data compiled by Reuters, spurred in part by a 2017 tax-cut windfall.
Earlier this week, the top five U.S. airlines spent around $44 billion in share buybacks between 2014 and 2019, according to data compiled by Reuters, spurred in part by a 2017 tax-cut windfall.
The United States' biggest banks will stop buying back their own shares, and will instead use that capital to lend to individuals and businesses affected by the coronavirus, an industry trade group said on Sunday.
The Financial Services Forum said its eight members - JPMorgan Chase & Co, Bank of America Corp, Citigroup Inc, Wells Fargo & Co, Goldman Sachs Group Inc, Morgan Stanley, Bank of New York Mellon Corp and State Street Corp - would each halt share repurchases through June 30, Reuters said.
The decision follows pressure from some U.S. lawmakers, who last week urged big banks to stop using funds to repurchase shares and instead support customers and the broader economy.
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