Trump: U.S. Could Ban Bonuses and Buybacks From Firms Taking Rescue Funds

President Donald Trump speaks during press briefing with the coronavirus task force, at the White House, Thursday, March 19, 2020, in Washington. Food and Drug Administration Commissioner Dr. Stephen Hahn, at left, and Dr. Deborah Birx, White House coronavirus response coordinator, at right listen. (AP Photo/Evan Vucci)
Evan Vucci/AP Photo

President Donald Trump said Thursday that he would support rules banning stock buybacks and executive bonuses from companies receiving coronavirus rescue funds.

“We don’t want that,” Trump said at the now daily White House news conference. “Some companies, as you know, did stock buybacks. It’s very hard to tell them not to but I would tell them not to.”

Trump declined to guarantee that a buyback ban would be part of the economic rescue legislation, pointing out to reporters that he must win support on Capitol Hill for any new program and cannot unilaterally dictate its provision.

Democrats on Capitol Hill, such as Elizabeth Warren, have been calling for the government to condition rescue funds on rules preventing corporations from doing things Democrats on Capitol Hill have long sought to restrict, such as paying bonuses to top executives, buying back their own shares, and making political expenditures.

“Let me be clear: We’re not doing no-strings-attached bailouts that enrich shareholders or pay CEO bonuses. Period,” Senator Elizabeth Warren (D-Mass.) tweeted.

On Tuesday, Senator Warren released a list of conditions that she described as a “progressive litmus test for bailouts to large corporations.”


  • Companies must maintain their payrolls and use funds to keep people working or on payroll.
  • Companies must provide a $15 minimum wage as quickly as practicable but no later than one year of the national emergency declaration ending.
  • Companies are permanently prohibited from engaging in share repurchases.
  • Companies are prohibited from paying out dividends or executive bonuses while they are receiving any relief and for three years thereafter.
  • Companies must set aside at least one seat — but potentially two or more, as the amount of relief increases — on the board of directors for representatives elected by workers.
  • Collective bargaining agreements should remain in place and should not be reopened or renegotiated pursuant to this relief program.
  • Corporations must obtain shareholder and board approval for all political expenditures.
  • CEOs must be required to personally certify a company is compliance and face criminal penalties for violating these certifications.

President Trump’s willingness to sign on to the buyback ban may take Democrats by surprise, as his proposal for direct payments to Americans has this week.

But Trump is unwilling to sign on to the full Warren agenda. Critics say the Warren conditions could lead some companies to prefer to layoff workers and shrink operations to preserve flexibility in the future, increasing the economic pain of the coronavirus slump.

The permanent ban on share repurchases is unlikely. Companies will likely be banned from making any capital distributions, including buybacks, dividends and increased executive bonuses, while emergency funding is outstanding. The question for lawmakers will be how long after companies pay back emergency loans or capital injections the bans should last.

Permanent bans would have the strange effect of trapping capital inside of companies that might not have productive uses for it. That could lead to wasteful spending or encourage companies to use cash to pursue mergers that would create large conglomerations.



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