Paris (France) (AFP) – Europe’s 100 largest companies pay out more than two-thirds of profits to shareholders on average, fuelling inequality and diverting cash which could be used for investment, Oxfam said on Tuesday. The charity urged a cap on CEO pay and dividend payments to tackle the injustice.
“While public finances run dry, companies have more than enough resources to invest in our future and Europe’s economic competitiveness, but they prefer to reward shareholders,” said Alexandre Poidatz, Oxfam spokesperson on multinational regulation. A European report by Oxfam shows the 100 largest European companies by turnover paid out an average of 70 percent of their profits to shareholders between 2022 and 2024. The NGO added that some companies, including Telefonica, BP, and the Zurich Insurance Group, paid out more to shareholders than they made in profits.
According to Oxfam’s report, nearly half of the companies surveyed paid out 32 times more to their shareholders than they invested in green transition measures. “When regulatory measures are in place, things work out, and when there aren’t, everything goes haywire,” Cecile Duflot, Executive Director of Oxfam France, told a press conference.
But Oxfam insists that “inequality is not inevitable: it is a choice. Europe’s largest companies must stop choosing a model that benefits only a minority and start acting in the interests of the many.” Poidatz said that a better distribution of profits would produce a more “virtuous” long-term model which would, in his view, also prove “much more competitive in the medium term.”
He added that “regulation is not a barrier to competitiveness. On the contrary, it is the framework for a desirable future. Ambitious nations cannot wait for Brussels to set things right.” Oxfam is recommending that European lawmakers and business leaders cap CEO pay at a maximum of 20 times the median employee’s salary while limiting dividends paid to shareholders until “decent” wages can be guaranteed alongside an “ambitious climate strategy.” The NGO is also calling for the introduction of quotas to ensure women’s representation in senior management roles.
© 2024 AFP
