Report: Home Depot spent billions on its own shares instead of raising pay
Home Depot ranks in the bottom 100 companies in the S&P 500 index for median pay. But it ranks near the top of those corporations in buying back its own stock shares, billions that instead could have been spent improving wages, according to a report from a Washington, D.C., think tank.
Lowe’s and Home Depot ranked No. 1 and No. 2, respectively, on stock buybacks from 2019 to 2023, money that could have more than doubled the annual pay for a median worker at the two huge home improvement retailers, said the left-of-center Institute for Policy Studies, which advocates overhauling CEO compensation and narrowing the pay gap between workers and top executives.
The 30th annual “Executive Excess” report examined the compensation practices of the 100 corporations with the lowest median wages among public companies in the S&P 500.
From 2019 to 2023, North Carolina-based Lowe’s spent $42.6 billion on buybacks and Vinings-based Home Depot used $37.2 billion on share repurchases, said Sarah Anderson, director of the IPS Global Economy Project and the author of the report.
Third on the list is Walmart, which spent nearly $31 billion. In all, the 100 companies examined spent more than half-a-trillion dollars on stock buybacks from 2019 to 2023, the report said.
Anderson called the amounts “staggering.”
A spokesman for Home Depot defended stock buybacks as an appropriate use of money that is not needed to run ongoing business operations or to invest in growth.
“First and foremost, we invest in the business and have done so at about 2% of sales on an annual basis,” he said. “After investing in the business, we plan to pay the dividend, and it is our intent to return any excess cash to shareholders in the form of share repurchases.”
Lowe’s did not immediately respond to a request for comment.
Supporters say buybacks can boost stock prices while providing additional rewards for the company’s shareholders.
Corporate critics, such as the authors of a 2020 article in Harvard Business Review, say the buybacks don’t do anything to improve a company’s production or efficiency. The buyback dollars also could be spent on research and development to create new products that could boost sales, or to help fund employee retirement plans.
