Never has the debate on value sharing been so hot. After a year 2020 marked with a hot iron by the health crisis, where all economic players tightened their belts, the results of companies, boosted by state support plans, started to rise again in 2021. They took advantage of this. to pamper their shareholders, but what about employees? With the 52 billion euros that the companies in the SBF 120 index paid out in dividends in 2021, “I put you 1 million people at work at 2,000 euros per month for a year”, launched Jean-Luc Mélenchon, on December 12, in the program “Political questions” on Franceinfo and France Inter, in partnership with The world.
The leader of La France insoumise could have added the 16 billion euros that these same companies spent in 2021 to buy back their own shares, according to the scores made at the end of November by the Natixis bank. The annual record, set at 19 billion euros, has already been beaten to the full, taking into account the 4% of its capital that L’Oréal acquired on December 7 from Nestlé for nearly 9 billion euros. “This trend will continue in 2022, the market is driven by excess liquidity”, underline Cédric Richard and Loïc Chenevier, two heads of equity markets at Natixis CIB.
“With negative rates, cash costs money”, adds Cyril Gérard, head of equity brokerage for corporate clients at Kepler Cheuvreux. This remains incommensurate with the sums brewed across the Atlantic. According to initial estimates, companies in the S&P 500 index have acquired $ 850 billion (750 billion euros) of their own shares on the stock market. The vintage thus exceeds the record of 2018, when the American bosses were eager to redistribute to their shareholders the tax cuts granted by President Donald Trump.
“We get crumbs”
These amounts are all the more dizzying as they are intended to go up in smoke. Because once the shares are picked up on the stock market, most of the time, companies cancel them. What to increase mechanically – since the denominator is reduced – earnings per share, performance indicator closely followed by financial analysts. And therefore the stock market price. This is why this practice is seen as a way, with the dividend, to remunerate the shareholder. When a company pays dividends, it gives a piece of the pie to its shareholders; when she redeems her titles, the cake remains intact, but there are fewer guests around the table.
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