You see, buybacks are "that one weird trick" where you can steal from the market, by inflating the EPS and hence your employee stock options, and not go to jail.
Executive total compensation is a wider problem, but shareholders seems generally satisfied with letting boards have almost as much of the company money as they want. Only people who really take it too far like Carlos Ghosn get punished.
They changed this a while back, didn't they? "Qualified dividends, on the other hand, are taxed at the capital gains rates, which are lower." [1]
AFAIK the only tax advantage of dividends now is that you're forced to pay tax every year, rather than being able to pay tax only once when you actually sell your shares. (Do let me know if there's something I'm missing.)
I think those French conditions are entirely reasonable and sensible.
What people are complaining about is that previously these companies did buy backs. Boeing did buybacks (when they were profitable, though they cancelled them when the 737 MAX disaster began). The airlines did buybacks. Etc.
People are complaining that if these companies all sat on enormous war chests they wouldn't need help now. But that has never happened and will never happen like that because it would be ludicrously inefficient for the market at large.
One can't spend half the money and have one but not the other.
[0]: https://www.businessinsider.com/airlines-coronavirus-bailout...
In a way it's similar to dividends, but not taxes in the same way.
Basically the logic behind the French government reasoning is "we're giving you money to support your business and your employees, not to give it away to shareholders".
Note that this wasn't the initial plan of the French governement, initially the plan was to pose no conditions, just saying "please be responsible in your choice". It's after the public backlash that they finally put conditions.
The real beneficiaries of buybacks are executives and employees with vested stocks. They both lose money on dividends and directly benefit from the contraction in available shares.
I wouldn't necessarily refer to this as "stealing" but it is a sneaky way to increase your compensation as an executive. It also causes a conflict of interest when a company is deciding whether to issue dividends or do a stock buyback.
Buybacks are just tax efficient dividends, and all of the hate against them is from people who don't realize this and haven't thought through the math.
In the article it says this rule applies to dividends, too. So at least it's not pure pandering.
If bailouts are normalized, there is no disincentive against such reckless behavior. I would like there to be permanent cash buffers to fund 1 year HR costs before any form of shareholder returns are allowed.
Also, it might be worth probing the cause of bizarrely low rates, or wondering if it's a good idea for a high corporate tax rate that distorts behavior so much. (If you're going to reply that the effective corporate tax rate is actually low because they engage in complex schemes X, Y, Z, to reduce their effective rate, then you're agreeing it's distortive and encourages socially-wasteful activity.)
The entity "pricing" the consequences has few consequences if they get it wrong, so why wouldn't they err on the side of doing more business and making more money?
No, the issue people have is not with the buybacks themselves but the massive debt binge many companies went on in order to buy these shares back. It's precisely because people have done the math.
No, a lot of it is from people who aren't too keen on capitalism or the means by which corporations return capital to the capitalist class in general, and particularly when it is “tax efficient”.
Or from people who do exactly realize this and have though through the math. I mean, its not like there is no reason why dividends tend to be taxed ...
A company can issue new shares and raise money when they need it.
A company can buyback shares when they have extra money they can't efficiently use (see: AAPL, MSFT, GOOG).
There is absolutely nothing nefarious about this mechanism, and if tax treatments vary blame the government (don't hate the playa, etc).
Buybacks are only a problem when cash-poor companies do buybacks. Either they're depleting a small contingency reserve, or they're even utilizing debt to do it.