A Democratic proposal that would limit stock buybacks takes dead aim at one of the market’s main pillars of support for the past decade.
However, the issue has been a hot one, particularly among progressives who believe companies should be doing more with their cash than rewarding shareholders and putting money in the pockets of executives who ultimately benefit from higher stock prices.
That sentiment helped fuel a measure being proposed Sens. Charles Schumer of New York and Bernie Sanders of Vermont who said in a New York Times op-ed that they want to apply “preconditions” on buybacks that would force $15 an hour wages, paid time off and health benefits.
“If the populist attacks become enacted, they will be meaningful,” said David Santschi, director of liquidity research at TrimTabs, which tracks where cash is going in the marketplace. “I don’t think it’s the government’s job to tell companies how they can spend money.”
