McConnell says the quiet part out loud, tells corporate America to ‘stay out of politics,’ but clarifies he’s ‘not talking about political contributions’

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Senate Majority Leader Mitch McConnell.

  • Mitch McConnell warned corporations to “stay out of politics” at a Monday news conference.
  • His comments came after a slew of corporations spoke out against Georgia’s restrictive voting law.
  • But Tuesday, McConnell clarified, saying he wasn’t “talking about political contributions. “
  • See more stories on Insider’s business page.

Senate Minority Leader Mitch McConnell has made it clear he wants corporate CEOs to stay out of politics. Unless that is, they’re putting money in politicians’ campaigns.

The senator from Kentucky chastised American corporations Monday, suggesting the companies’ leaders need to stop speaking out about Georgia’s restrictive new voting law, warning there could be consequences for those that continue to do so.

“My advice to the corporate CEOs of America is to stay out of politics. Don’t pick sides in these big fights,” McConnell said at a news conference Monday.

Twitter users and journalists were quick to point out McConnell’s status as a longtime recipient of corporate donations, outstripping most other members of Congress by some measures when it came to political donations.

But McConnell rebuked any suggestions of hypocrisy Tuesday, clarifying his original statements and carving out an exception for political contributions.

“I’m not talking about political contributions,” McConnell said during a stop at a Kentucky health clinic Tuesday. “I’m talking about taking a position on a highly incendiary issue like this and punishing a community or a state because you don’t like a particular law they passed. I just think it’s stupid.”

Major League Baseball announced last week that it would no longer host its 2021 All-Star Game in Atlanta in the wake of Georgia’s new voting law, which Civil Rights activists have criticized as suppressing voters and in particular, Black voters.

Many corporations followed suit, including major Georgia-based companies like Coca-Cola, Delta, and Home Depot.

Republicans have slammed the MLB’s decision and the onslaught of corporate responses, calling for boycotts and threatening tax hikes to punish companies that have spoken out.

On Monday, McConnell accused corporations that oppose the law of acting like a “woke alternative government,” saying it would “invite serious consequences if they became a vehicle for far-left mobs to hijack our country from outside the constitutional order.”

But the minority leader, who received more than $3 million in corporate PAC donations during the 2020 election cycle, according to OpenSecrets, was careful in his language Tuesday, saying businesses have a “right to participate in the political process.”

“Most of them contribute to both sides, they have political action committees, that’s fine, it’s legal, I support that,” he said.

The Citizens United supreme court ruling from 2010 said that “independent political spending” was protected as part of the First Amendment.

According to MarketWatch, McConnell received $258,880 from CEOs and S&P 500 companies during the 2020 cycle – more than any other candidate in a competitive Senate race that year.

However, when it comes to the First Amendment right to free speech not curtailed by Congress, while not issuing punishment, McConnell did issue a warning: “If I were running a major corporation, I would stay out of politics,” adding that the corporations are “irritating a hell of a lot of Republican fans.”

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Republicans are threatening tax hikes and boycotts to punish companies that criticize restrictive voting laws

Senate Majority Leader Mitch McConnell
Senate Majority Leader Mitch McConnell offers a stimulus compromise at a press conference with Republican Senator from Wyoming John Barrasso (L) and Republican Senator from South Dakota John Thune (R) at the Capitol.

  • Top Republicans have proposed punishing corporations who criticized GOP bills restricting voting.
  • Firms including Coca-Cola and American Airlines have criticized the bills in Georgia and Texas.
  • In Georgia GOP lawmakers attempted to strip Delta Air Lines of tax breaks.
  • See more stories on Insider’s business page.

Republicans are threatening to punish corporations that have spoken out against voter suppression laws with tax hikes and boycotts.

In a statement Monday, Senate minority leader Mitch McConnell accused corporations that oppose the laws of acting like a “woke alternative government.”

He warned that this “will invite serious consequences if they become a vehicle for far-left mobs to hijack our country from outside the constitutional order.”

McConnell was responding to statements from companies including Coca-Cola and Delta Air Lines criticising laws that restrict voting in Georgia, brought in by the state GOP.

Major League Baseball also pulled an All Stars game from the state last week in protest at the law.

American Airlines and Dell computers have criticized proposed voting restrictions in Texas, where they are based.

McConnell didn’t detail what consequences the corporations might face, but Politico on Monday reported on warnings and legislative moves by Republicans to end tax breaks or extract other financial penalties.

  • Georgia’s GOP-controlled House last week voted to end Delta’s jet fuel tax breaks, with the airline a major employer in the state. The measure though was not passed by the state Senate before it went into recess, leaving it off the table for now.
  • Prominent Republicans, including Sen. Josh Hawley, Sen. Mike Lee and Donald Trump Jr have advocated stripping the MLB of its status as a sport and not a business under anti-trust laws.
  • “Why are we still listening to these woke corporate hypocrites on taxes, regulations & anti-trust?” Sen. Marco Rubio, R-Fla., tweeted, adding to a general chorus of criticism.
  • Former President Donald Trump in a statement last week called for supporters to boycott corporations including Coca Cola and Delta.
  • Rodney Anderson, Chairman of the Dallas Republican Party, tweeted and later deleted a message on Friday suggesting cancelling tax breaks American Airlines and Dell have in the state.

The escalating battle over voting restrictions places the Republican Party in the unfamiliar position of going against some of the biggest names in corporate America. The party has long positioned itself as the champion of low corporate taxes and free enterprise.

Among Donald Trump’s key policies was a huge 2017 corporate tax cut passed by the then-GOP-controlled Congress.

In recent years some corporations have eschewed their usual neutrality to take positions on so called “culture wars” controversies.

Trump during his presidency several times urged boycotts of companies he accused of opposing his administration’s agenda, such as tire firm Goodyear, and championed companies owned by allies and supporters.

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Corporate share buybacks are at a record high but capex and tax demands may slow the pace, says BofA

US dollar bill
  • A four-week average of share buybacks hit a record of nearly $2 billion, according to research from Bank of America.
  • Wall Street may be on track for $900 billion of gross S&P 500 buybacks in 2021.
  • But buybacks may slow down if companies put more cash into capital expenditures.
  • See more stories on Insider’s business page.

Share repurchases by corporations reached record highs in March, but buybacks may slow if companies decide to swing their cash into capital expenditures or if they adhere to tax regulations stemming from the government’s stimulus efforts, said Bank of America.

The four-week average of repurchases by corporate clients hit record highs “after a big resurgence in buybacks this month” that put transactions at nearly $2 billion, said a team of equity and quant strategists led by Jill Carey Hall in a research note released Wednesday.

If corporate client buybacks continue at the pace of $21 billion year-to-date or more than $80 billion annualized, that would imply more than $900 billion of gross S&P 500 buybacks in 2021, the strategists said. It said it based that figure on a roughly 9% average share of S&P buybacks over the last five years.

“This would be above 2018’s peak $800 billion levels and nearly double 2020’s depressed $500 billion levels, suggesting upside risk to our forecast for no net EPS impact from buybacks to the S&P,” BofA said.

Recent repurchases have been prominent in the tech sector, with near-record buybacks in each of the last six weeks.

However, the strong pace of overall stock repurchases “may not persist if cash deployment priorities shift more toward capex, which investors want and where corporates have underinvested,” said BofA. It referenced its Fund Managers Survey issued March 16 that showed “investors now want capex” and not buybacks or debt reduction.

“We see multiple tailwinds for capex including the cyclical rebound, a potential infrastructure bill and US re-shoring,” or relocations by companies back in the US, Carey Hall said.

President Joe Biden is set later Wednesday to unveil a $2 trillion infrastructure bill that’s expected to focus on investments including in roads, bridges, and broadband.

“What else can curtail buybacks? Payback for stimulus (i.e., higher taxes) which could cost 5-10% EPS growth,” said BofA.

Biden is expected to propose that his eight-year infrastructure plan be paid for with tax hikes on corporations. Earlier this month, Biden signed off on a $1.9 trillion fiscal stimulus package.

BofA said single-stock corporate buybacks in tech last week hit roughly $1.61 billion. March was a relatively rough month for large-cap tech shares as investors rotated from the high-flying group and into small-cap and cyclical shares. The rotation has been stoked in part by the vaccination of millions of Americans that’s been leading more businesses to resume normal operations.

BofA said it’s starting to see a pickup in buybacks in other sectors including consumer discretionary, health care and financials. The Federal Reserve said last week that as of June 30 it will lift share buyback and dividend-payout restrictions on banks that pass stress tests. The Fed last year imposed the restrictions as a way to safeguard the financial system in the face of the COVID-19 pandemic.

Last week, corporate buybacks reached $143 million for consumer discretionary stocks and $119 million in health care shares, BofA data shows.

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Over half of companies will require a vaccine for employees to work on-site, survey says

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  • More than half of executives say they will require employees to receive the vaccine before returning to work, according to a West Monroe poll.
  • Companies located on the West and East Coasts are more likely to require a COVID-19 immunization record.
  • Most companies do not expect to return to a stable financial position until the vaccine is widely available.
  • Visit Business Insider’s homepage for more stories.

More than half of executives, or 51%, say they will require employees to receive the vaccine before returning to work, according to a poll of 150 C-Suite executives released Tuesday.

A COVID-19 immunization record could become a business essential. Employers can legally require workers to get a COVID-19 vaccine and even ban them from the office if they don’t, according to the Equal Employment Opportunity Commission.

In West Monroe’s Quarterly Executive Poll, a company’s desire for employees to get the vaccine directly correlates to their location. 

Read more: What’s coming next for COVID-19 vaccines? Here’s the latest on 11 leading programs.

East and West Coast companies, 59% and 55% respectively, said they would require workers to receive vaccine doses. While in the Midwest and south, CEOs are more likely to not require a vaccine, with 53% and 57% respectively saying they would not force employees to get a COVID-19 vaccination.

The majority of the executives do not expect their companies to stabilize or return to pre-pandemic revenue levels until near the end of 2021, the poll found. That’s the same timeframe that the vaccine is expected to be widely distributed.

While the Center for Disease Control and Prevention says the vaccine could be available to the general public as soon as the spring of 2021, the vaccine roll-out has failed to hit several key targets set by the Trump Administration. Recent vaccine timelines do not anticipate the US will achieve herd immunity until the end of the year.

Dr. Anthony Fauci, the nation’s leading infectious disease expert, says he expects the COVID-19 vaccine will become mandatory in many institutions.

“I would not be surprised, as we get into the full scope of [COVID-19] vaccination, that some companies, some hospitals, some organizations might require [COVID-19] vaccination,” he said in an interview with Newsweek the first week of January.

See also: Silicon Valley billionaire investor Vinod Khosla said involving industry insiders in Pfizer and BioNTech’s vaccine early in development ‘would have slowed down’ progress

In a December poll of 150 current and recent CEOs of major companies, 72% of respondents,  – including Walmart, Goldman Sachs, and UPS –  said they were open to COVID-19 vaccine mandates.

Despite the potential mandates, corporate workers are a low priority in vaccine distribution plans.  Healthcare workers and frontline workers, as well as at risk members of the community take precedence over employees that can more easily work from home. The vaccine will likely not be available for non-essential workers for many months to come.

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