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Walgreen Co.

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Forum reference:

Officials responsible for public pensions organize to advocate use of corporate capital for long term growth


Source: New York City Comptroller, May 20, 2015 announcement




Contact : Eric Sumberg,, (212) 669-3535


May 20, 2015





(New York, NY) – On Wednesday, New York City Comptroller Scott M. Stringer, New York State Comptroller Thomas P. DiNapoli, Chicago Treasurer Kurt A. Summers and California Controller Betty T. Yee released a joint letter highlighting their concerns about the overuse of buybacks at portfolio companies, including McDonald’s, which holds its Annual General Meeting tomorrow in Oak Brook, Illinois.

The full text of the joint letter is below and attached:

As fiduciaries to pension funds with over $860 billion in assets and responsible for the retirement security of 4.3 million participants, we rely on companies to deliver sustainable, long-term value. Sustainable economic growth depends on companies investing in their future through innovation, human capital, and growth. Companies must pursue a balanced approach to capital allocation, both reinvesting in their long-term health and distributing profit to shareowners.

We are concerned, however, that many companies have lost their balance. Productivity growth in companies used to be aligned with commensurate wage growth – a rising tide that drove decades of economic prosperity. Growing corporate coffers of cash facilitated rising capital expenditures. And U.S. companies were at the forefront of crucial innovation.

 Today, however, 95 percent of corporate earnings are being distributed to shareowners, prompting us to question whether companies are adequately reinvesting for sustainable returns over the long-term. If the pendulum swings too far in favor of returning capital to shareowners, the future viability of the companies in which we invest may be placed at risk.

Trillions of dollars have been spent on share buyback programs in recent years. Buyback programs are one effective means to return capital to shareowners. However, in order to maximize shareholder value for the long-term, companies must also adequately invest in the future. Growth requires investment. 

One timely illustration is McDonalds, which holds its annual shareowner meeting this week. McDonalds is facing serious performance challenges. But despite a recently announced and much needed turnaround plan, the company continues to direct capital towards an aggressive share buyback program.

Eric Sumberg (Stringer) 212-669-3535
Matt Sweeney (DiNapoli) 212-383-1388
Katie Hickey (Summers) 312-744-3356
John Hill (Yee) 916-445-2636

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