Copyrighted Image? DMCA | U.S. corporate profits abound, but for most Americans, prosperity can't be found. Open-market repurchases -- stock buybacks -- are central to the problem. From 2004 to 2013, 454 companies in the S&P 500 Index expended 51 percent of their profits, or $3.4 trillion, on repurchases, on top of 35 percent of profits on dividends. Of profits not distributed to shareholders, a big chunk was parked overseas, under a tax loophole that encourages U.S. companies not to invest at home. More than three-quarters of compensation for the 500 highest-paid executives came from stock options and stock awards. The real bottom line: corporate profits are high, but corporate reinvestment is low. |
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