Forum Home Page [see Broadridge note below]

 The Shareholder ForumTM`

Fair Investor Access

This public program was initiated in collaboration with The Conference Board Task Force on Corporate/Investor Engagement and with Thomson Reuters support of communication technologies. The Forum is providing continuing reports of the issues that concern this program's participants, as summarized  in the January 5, 2015 Forum Report of Conclusions.

"Fair Access" Home Page

"Fair Access" Program Reference


Related Projects 2012-2019

For graphed analyses of company and related industry returns, see

Returns on Corporate Capital

See also analyses of

Shareholder Support Rankings


Forum distribution:

Financial services provider reports that short term financial engineering increases short term stock prices


Source: The Wall Street Journal | CFO Journal, June 2, 2015 article



CFO Journal

2:54 pm ET
Jun 2, 2015


Citi Report: Market Rewards Shareholder Returns Over Capex


By Vipal Monga

Activist investors like Carl Icahn are prodding companies to spend more on buybacks than on capital investments.

―Victor J. Blue/Bloomberg News

The market is favoring corporations that return more of their cash to shareholders than what they invest in capital, according to a report from Citigroup.

Industry sectors such as consumer staples, healthcare and information technology, where companies  generally spent more on buybacks and dividends than they did on capital investments, had better total returns and higher market valuations between 2010-2014, said the report from Citi’s research unit. Those sectors did better than ones where companies had to emphasize capital investments, such as energy and utilities.

“The message to CEOs is simple – if you want a higher [price-to-earnings multiple] and a rising share price, then pay out more and invest less,” wrote Citi’s analysts. “Those CEOs who ignore this message leave themselves vulnerable to activist shareholders.”

Partly in response to activist pressures, corporations in the U.S. have been slashing long-term spending and returning billions of dollars to shareholders, as The Wall Street Journal reported last week.

Companies such as Apple Inc., and DuPont Co. have shovelled cash to shareholders after being approached by activists. But not all had need that prod. General Electric Co., for example, announced a $50 billion buyback without any pressure.

Even U.S. Steel Corp., which isn’t buying back stock, has tried to anticipate activist concerns by raising the hurdles that new capital projects must clear before the company put its [sic] in them.


Copyright ©2015 Dow Jones & Company, Inc.


This Forum program was open, free of charge, to anyone concerned with investor interests in the development of marketplace standards for expanded access to information for securities valuation and shareholder voting decisions. As stated in the posted Conditions of Participation, the purpose of this public Forum's program was to provide decision-makers with access to information and a free exchange of views on the issues presented in the program's Forum Summary. Each participant was expected to make independent use of information obtained through the Forum, subject to the privacy rights of other participants.  It is a Forum rule that participants will not be identified or quoted without their explicit permission.

This Forum program was initiated in 2012 in collaboration with The Conference Board and with Thomson Reuters support of communication technologies to address issues and objectives defined by participants in the 2010 "E-Meetings" program relevant to broad public interests in marketplace practices. The website is being maintained to provide continuing reports of the issues addressed in the program, as summarized in the January 5, 2015 Forum Report of Conclusions.

Inquiries about this Forum program and requests to be included in its distribution list may be addressed to

The information provided to Forum participants is intended for their private reference, and permission has not been granted for the republishing of any copyrighted material. The material presented on this web site is the responsibility of Gary Lutin, as chairman of the Shareholder Forum.

Shareholder Forum™ is a trademark owned by The Shareholder Forum, Inc., for the programs conducted since 1999 to support investor access to decision-making information. It should be noted that we have no responsibility for the services that Broadridge Financial Solutions, Inc., introduced for review in the Forum's 2010 "E-Meetings" program and has since been offering with the “Shareholder Forum” name, and we have asked Broadridge to use a different name that does not suggest our support or endorsement.