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Rep. Hill Featured in New York Times: Government Shouldn't Interfere in Stock Buybacks

By French Hill

To the Editor:

Re “Workers Before Buybacks,” by Chuck Schumer and Bernie Sanders (Op-Ed, Feb. 4), calling for the limitation of corporate stock buybacks:

The senators seem to believe that they know how best to allocate capital across our $20 trillion economy. Limiting stock buybacks disincentivizes aspiring entrepreneurs to go public and hinders individual shareholders and retirees from building equity.

Management and boards of directors for public companies have a fiduciary obligation to maximize long-term appreciation for their shareholders. This requires a thorough knowledge of the company’s growth, capital needs and stock valuation. Policymakers interfering with this fiduciary obligation undermine the free market, possibly leading to unintended consequences for the investor.

As shareholder values fall, stock returns to investors will be noncompetitive, and the spotlight will shine on the leaders of the company that made poor capital allocation decisions.

Government policy has no business meddling with capital allocation. Boards should take full responsibility for the decisions that affect their shareholders.