Economist Podcasts Held in cheque: corporate payouts and covid-19
Apr 22, 2020
Stanley Pignol, The Economist's European business and finance correspondent, discusses corporate payouts in the pandemic era. He critiques companies for prioritizing dividends over employee support during economic downturns. The impact of COVID-19 on wildlife is also explored, revealing how lockdowns led animals to reclaim urban spaces. Pignol highlights ongoing environmental issues, notably the severe coral bleaching affecting the Great Barrier Reef, emphasizing the interconnectedness of corporate practices and climate challenges.
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Shareholder Rewards
- Dividends and share buybacks are methods for successful companies to reward shareholders.
- They function similarly to rent or interest payments, reflecting ownership.
Share Buybacks: Dividends in Disguise
- Share buybacks are essentially dividends with a PR problem.
- Companies repurchase shares, reducing the number of shareholders and increasing the value of remaining shares.
Dividends Under Scrutiny
- Before the COVID-19 crisis, there were concerns about excessive shareholder payouts compared to reinvestment.
- Dividends can be beneficial by recycling capital from mature to growing industries.