The bill also states the government has right to “participate in the gains” of businesses to which it is lending. That could be through warrants, stock options, common or preferred stock, or other equity tools.
President Donald Trump said Thursday he would consider taking an equity stake in companies accepting federal aid, a move that would ultimately dilute shareholders. Trump didn’t specify which companies he was referring to but called out those that have bought back stock. Delta, American, Southwest and United airlines have collectively spent about $39 billion over the last five years buying back shares.
Democrats have said they may push for more restrictions, like forbidding stock buybacks. Trump himself said he would be “OK” with such a stipulation.
House Speaker Nancy Pelosi, D-Calif., and Senate Minority Leader Chuck Schumer, D-N.Y., said in a joint statement: “Any economic stimulus proposal must include new, strong and strict provisions that prioritize and protect workers, such as banning the recipient companies from buying back stock, rewarding executives, and laying off workers.”
Airlines for America, a lobbying group that represents U.S. airlines including Delta, American, United and Southwest, earlier this week issued a dire warning about the industry, saying its “survival” depends on government aid. The group originally requested $25 billion in direct grants and another $25 billion in loans.
The hotel and tourism industry, meantime, has requested $150 billion in direct grants.
Trump himself owns several hotels and resorts.
-CNBC’s Leslie Josephs contributed to this report.
Source Article from https://www.cnbc.com/2020/03/19/coronavirus-bailout-senate-gop-bill-caps-executive-salaries-at-425000.html
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