Chevron‘s $15B stock buyback pleases shareholders, riles critics
Enriched by high oil prices, Chevron Corp. will spend up to US$15 billion buying back its own stock _ a commitment that pleased shareholders and rankled critics clamouring for bigger investments in projects that might help lower energy costs. The three-year repurchase program announced Wednesday served as yet another reminder of the cash cascading into the oil industry while motorists have been trying to cope with higher gasoline bills. The dichotomy has triggered U.S. Congressional threats to repeal some of the industry‘s tax breaks or impose a special tax on profits above a certain threshold. “Chevron is free to do what it wants with its money, but this is going to fuel the fire for Congress to get involved,‘‘ predicted Tyson Slocum, director of the energy program for the consumer watchdog group Public Citizen. “The money they are funnelling for shareholder goodies leaves less for other projects.‘‘ (…) Exxon Mobil Corp., the world‘s largest publicly traded oil company, has returned $88.5 billion to its shareholders through stock buybacks and dividends since the end of 2003. Stock repurchases are commonly used throughout corporate America to reward shareholders and boost earnings per share by diminishing the number of outstanding shares. The buybacks also increase the amount of stock available in the corporate treasury to finance acquisitions. Slocum and many legislators want big oil companies to divert some money away from shareholders to finance initiatives to expand energy supplies and develop alternative energy sources. Image source: abouttheimage.com. > Continue.
News selected by Covalence | Region:
