New York, NY — It’s just what the GOP said we’d hear from a CEO after being handed a big tax break.
But when Charles Scharf announced plans last month to spend his company’s tax savings on higher wages and technology, investors began selling.
The Bank of New York Mellon CEO said he had a responsibility to “share the benefit” with workers and build the “company of the future.”
By the end of the day, the bank’s stock was down 4.4 percent.
But investors want to share in the tax bounty as well — through higher dividends and buybacks.
The biggest tax rewrite in three decades was sold by its Republican backers as a way to help American workers, and there have been plenty of announcements about bonuses and plans to buy equipment and make other capital investments to improve productivity and raise wages.
But much more money has been earmarked for dividends and buybacks.
Retailer Lowe’s has authorized $7.1 billion in buybacks, triple the level planned before the tax overhaul.
Radio giant Sirius XM has increased its program by a fifth to $12 billion.
And Wednesday Cisco announced the biggest number of all — a $25 billion increase to its repurchase program.
Buybacks, in which companies purchase their own shares and retire them, are popular with investors because fewer shares outstanding lifts earnings per share, the most watched barometer of corporate success.