Measurements of Left in Favour of The Shareholders

The companies will be able to repurchase 10% of their capital.
The Stock Exchange always adored the left with the capacity. The government Jospin has just granted an ultimate tax nudge in the right direction, drowned to him in will fatras usual DDOEF (various provisions of economic order and financier), adopted yesterday in the Council of Ministers.

It is a question of making it possible the quoted on the stock exchange large companies to repurchase their own actions. Why make? Quite simply because these companies collapse under the benefit since years, so much so that they do not know any more what to make some they invest very little. All that is not distributed to the shareholders in the form of dividends remains in the trunks. This treasury is of course placed, but it is useless, it does not have more anything to see with the social object of the company. From where the idea to return the money to the shareholders, by repurchasing part of their actions. According to the banker Bernard Esambert, who militated much in the corridors of Bercy, one could thus distribute 40 billion francs to them per annum.

The government text is not satisfied to legalize the repurchase by a company of its own actions (within the limit of the 10% of the capital), it encourages it fiscally. A shareholder who is made refund his titles should be taxed with the title with the income tax: he buys an action 100 francs, the company repurchases 150 francs to him, he must declare 50 francs of assessed income, according to the scale of the income tax (up to 54%). Thanks to the DDOEF, it “would profit” (it is the term used in the text) from the mode of imposition on the appreciations, that is to say a taxation with 25% only. For the high taxpayers, located in the maximum section of the income tax, the tax economy is appreciable half less.

Of course, the government is justified in the name of the general interest. It is a question “of optimizing the allowance of flows of saving within the French economy”. Since the money is rare, the companies which have some too much (which “reached a advanced stage of maturity”, moderates the text) will return it to the Stock Exchange, which will place then this money in companies which need some really (“in phase of fast development”).

However, the ministry for the Economy knows too the mysteries stock exchange to be unaware of that the “been worth shareholder” (value actionnariale) has to see little with the general interest. Because, if the companies repurchase then destroy their own actions, it is especially to like the Anglo-Saxon pension funds. The less there are travel documents, plus the earning per share increases. And all this international capital does not reason any more but in terms of financial ratios of this kind. Thus is explained current fury with Wall Street: last year, nearly 1.500 companies repurchased for more than thousand billion francs their own actions.

The fashion is crossing the Atlantic. Elf (for 5 billion francs) already threw itself to water. With the new tax mode, the large companies of the CAC 40 will hustle themselves. Total already announced the repurchase of 6,5% of its own capital. With an explanation which is worth its heavy oil: having distributed so much stock options (actions under preferential conditions) to its leaders, it is necessary for him now to fight against the “dilution” of its capital. And to repurchase with a hand what it had given of the other.