The Senate Banking Committee's ranking member has a dramatic proposal for companies: Halt share buybacks or pay your workers for the privilege.
In a speech, Sen. Sherrod Brown, D-Ohio, outlined his bill, which would require every publicly traded company to pay $1 to every employee for every $1 million the company purchases in share buybacks.
Brown said the bill is designed to force companies to think twice before boosting share prices through buybacks.
The senior Ohio senator specifically called out JPMorgan Chase & Co. and Walmart Inc. for their 2018 buyback amounts, which totaled $20 billion and $8 billion, respectively.
Under Brown's bill, JPMorgan would have had to shell out $20,000 to every employee in 2018. Even higher-level employees, such as executive vice presidents, would qualify for the so-called worker dividend, Brown said.
"If [the companies] want to avoid paying the worker dividend, the solution is pretty simple," Brown said in prepared remarks. "Don't do $8 billion in stock buybacks."
Sen. Tammy Baldwin, D-Wis., reintroduced a similar measure in March that would take Brown's proposal a step further. Baldwin's bill would completely ban stock buybacks and require one-third of boards to be elected by employees.
But Brown said that proposal would not stop companies from coming up with ways to "enrich their shareholders." Brown said his bill would deter buybacks and return money to employees, not shareholders.
U.S. Chamber of Commerce Executive Vice President Tom Quaadman slammed Brown's bill in a statement shortly after the senator's announcement, saying that it would stifle "hope, opportunity and innovation for American workers and Main Street business owners."
Brown said the ultimate goal of the bill is to push companies to spend excess capital on equipment purchases, innovation and higher wages for employees.
"We figure from this bill, there would be fewer stock buybacks, and then that money would go into worker training maybe, higher ed programs for workers, it would go to build the business, " Brown said. "It's not taking money and putting it in a place that doesn't work for the economy."
The bill does not have a companion measure in the House, and Brown said he would actively seek co-sponsors later this year.