Episode 118 - CEOs Part 2 - The Dirty Secret That Earns CEOs 1,000 Times Your Salary!
Franklin Delano Roosevelt put a stop to Corporate Stock Buybacks - believing it shameful for CEOs to cash-in while their companies shrank. So why allow them now?
Executives and shareholders making money during a recession isn’t new. In fact, it was during the Great Depression that CEOs came up with a devious way to make their crumbling stocks appear valuable again - at least on paper. Even while they were closing factories and laying off workers.
On Part 2 of our CEO series, Todd and Joe talk about Corporate Stock Buybacks - the ultimate Golden Parachute. Which we officially re-dub the “Golden Glider” for how many CEOs sail the majority of their careers on it. We also talk about why limiting buybacks has become a bi-partisan goal, which could help strengthen the nation. And how cutting buybacks has become a pledge for noble executives, like the CEO of Pepsi, who want to enrich their company instead of their own pockets and shareholders at the expense of their business.
Sources:
https://www.youtube.com/watch?v=ylLTMYt24lA
https://www.reuters.com/investigates/special-report/usa-buybacks-pay/
https://www.fool.com/investing/2021/02/17/pepsico-is-done-buying-back-its-stock/
https://www.fool.com/research/average-retirement-savings/#:~:text=62%25%20of%20Americans%20aged%2018%E2%80%9329%20have%20retirement%20savings%2C,only%2028%25%20feel%20on%20track&text=48%25-,Data%20source%3A%20Board%20of%20Governors%20of%20the%20Federal%20Reserve%20System,29%20had%20some%20retirement%20savings.