While the government seeks to plug the breach opened in the public accounts, the establishment of a tax on share buybacks carried out by companies now attracts a strong political consensus. Over the months, this financial gymnastics – incomprehensible beyond the business sphere – appears as the ultimate symbol of the excesses of financial capitalism accused of increasing inequalities.
This practice, very popular on Wall Street, consists of companies acquiring their own shares and then, very often, canceling them. This amounts, in the same way as the dividend, to returning excess capital to shareholders: this is the “accretive” effect, said in a trivial way, fewer shares in circulation means fewer people to share the cake.
“While the government is looking for 10 billion euros on the backs of the unemployed in particular, while businesses are showered with public money like never before [215 milliards d’euros en 2023]the CAC 40 giants are speculating to enrich their shareholders by burning 30 billion euros »protested François Hommeril, the president of the French Confederation of Management-CGC, on February 21 on X.
The “cynicism” of multinationals
Nearly half of this record amount comes from two companies, TotalEnergies (9.2 billion euros) and BNP Paribas (5 billion). Adding the 67 billion euros distributed in the form of dividends, according to data compiled by The Vernimmen LetterCAC 40 companies returned a total of 107 billion euros to their shareholders in 2023, for profits made in 2022. For 2024, new share buyback programs are already planned, at Stellantis, Michelin or TotalEnergies .
Already in March 2023, in the midst of the uproar over pension reform, Emmanuel Macron himself launched the charge against the “cynicism” multinationals “who make such exceptional income that they end up using this money to buy back their own shares”. And the President of the Republic then pleads in favor of a levy so that the “workers can benefit from this money”.
This presidential outing had greatly irritated the big bosses like Bernard Arnault, the CEO of LVMH who had for a time suspended negotiations to join the rank of “premium partners” of Paris 2024. In the fall, during discussions on the 2024 finance bill, amendments to tax “superdividends” or share buybacks had flourished, but Bercy had resisted, claiming to want to respect the promise not to increase taxes.
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