Dow Fires 1,750 After Boosting Share Buyback Program To $10 Billion

Tyler Durden's picture

Several months ago we showed that in the aftermath of its brush with vocal activists such as Dan Loeb and Nelson Peltz, Dow Chemical did everything it could to push its stock price as high as it possibly could go. It did this in the simplest of ways: by buying back its own stock. In fact, over the past year, DOW bought back over $4 billion in DOW shares after barely doing any stock repurchases in prior years.

 

But that's just the beginning.

As a reminder, six months ago, Dow increased its share buyback plan by $5 billion which boosted the total share repurchase program to just shy of $10 billion.  It did this so CEO Andrew Liveris would keep his job, and keep shareholders happy as it scrambled to prevent Daniel Loeb's push to split the company.

Of course, it also didn't hurt that as a result of the buybacks, shareholders were ok with a 30% jump in the CEO's compensation despite a consistent decline in DOW's net income.

 

Still, without an organic growth in the company, and with increasing compensation for C-suite execs, and with just financial engineering to make the company appear prettier than it is, someone had to foot the bill.

Sure enough, moments ago we found precisely who.

On April 29, 2015, the Board of Directors of The Dow Chemical Company (“Dow” or the “Company”) approved actions to further streamline the organization and optimize the Company’s footprint as a result of the pending separation of a significant portion of Dow’s chlorine value chain. These actions, which will further accelerate Dow’s value growth and productivity targets, will result in a reduction of approximately 1,500 to 1,750 positions across a number of businesses and functions.

And there you have it: stock not following the company's profitability decline due to buybacks, activists happy because stock is gradually rising, and the CEO is delighted because he made 30% more last year.

As for those 1500-1750 workers who just got laid off to make sure all the above could take place, well, they can just daytrade DOW stock. And by trade, we mean frontrun the company's upcoming surge in buybacks.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Slave's picture

Midland, MI is FUCKED.

Gaius Frakkin' Baltar's picture

0 shares, 0 employees, infinite value...

That's the level of absurdity we're going to...

clooney_art's picture

It's all legal dudes.

Country being bankrupted legally.

Headbanger's picture

Well, there goes America right down the toilet of greed.

 

Vampyroteuthis infernalis's picture

Corporate managers doing the only thing they know how to, lay off people and spout BS. It is over for our society.

corporatewhore's picture

MBA Bullshit is easily identified.

First, create a language unique to your corporation (aka "baffle them with bullshit")

I've seen this in the insurance industry--referring to an Irrevocable Insurance Trust as a Multiple Such n Such Trust.

Never call something a "something"--it has to have a brand name.

use a lot of high flying words such as "facilitate" (nails on a chalkboard), "partners", "team"

layoff with a smile

never broach the sadness of losing a job and facing the potential loss of family, home, or replacemnt job/income

after 30 years my advice to anyone--go independent and fuck them.

 

kchrisc's picture

"Country being bankrupted legally."

With respect, but the FedRes and their toilet paper issuance are Unconstitutional.
The DC US government is operating Unconstitutional.

So the plundering is not "legal." Not by a long shot.

Liberty is a demand. Tyranny is submission.

 

"Grift is not thrift."

Ward cleaver's picture

Not true, you need a minimum wage smuck to oil the machines. Maybe he is the CEO. For all u people out there that feel the end coming, sign up for a 90 day rehab stint (alcohol best) so buys u 3 months plus they won't fire you upon return as u would have a great lawsuit. Yes folks, this is what it has come to.

MASTER OF UNIVERSE's picture

I want to go to rehab, YES, YES, YES!

 

:|

GMadScientist's picture

1 share, 1 "employee", priceless..."privately held", bitchez.

VinceFostersGhost's picture

 

 

Dow Fires 1,750

 

OMG, they'll save a fortune in Obamacare premiums.

Dubaibanker's picture

Its not just US or Michigan is fucked.

The whole world is!

Even down under...thousands of job cuts just today....

WorleyParsons Cuts 2,000 Job on Falling Oil Prices; Shares Slump Another CSG setback as Arrow sheds $700m and 500 workers
junction's picture

DOW should have invited Obama to the announcement that !,500+ employees will soon be getting 26 weeks of unemployment insurance (except in North Carolina). What used to be called "greenmail" is now the norm in the USA, with the tacit approval of former AG/Sinaloa cartel gun smuggler Eric Holder.  Holder and his crooked successor, Loretta "Asset Forfeiture/Structuring" Lynch prove that joke asking why is an aspirin white?  Because it works.  Holder and his crew of criminals prefer stealing from Americans to working to protect the Bill of Rights.  

Never One Roach's picture

" That's Growth you can believe in ! "

ebworthen's picture

Go back to burgers and fries for $3 instead of $7.50?

Cup of regular coffee for .50 cents?

Quality and value not bling?

Fire the M.B.A.'s?

rejected's picture

but, but, but,,, how can they pay the $15 per hour living wage?

as fast as they're printing it may be up to $20 per hour now.

yogibear's picture

Just keep firing people and buying back shares. A plan for the long term (sarc).

 

corporatewhore's picture

Did they do it on Friday?  Or the holidays?

You know most people don't commit suicide due to job loss on a Friday or a Holiday.  

Yep, I had an asshole HR person say that once.  Incredible

WillyGroper's picture

What I wonder is when someone is going to snap, as in postal.

ebworthen's picture

The future of American corporatocracy - CEO's and shareholders, and some dummy employees to answer the phone and post web pages.

Ward cleaver's picture

What do u mean by future, it is here already.

Never One Roach's picture
More job cuts hit Texas energy companies

May 4, 2015

 

Over the past six months, the world’s three largest oilfield services firms have cut almost 40,000 jobs combined, a number that is up significantly from previous forecasts.

 

http://www.bizjournals.com/houston/news/2015/05/04/more-job-cuts-hit-tex...

orangegeek's picture

funny how capex is in the toilet, yet markets aren't responding to tanking vendors like - say for example, Dow chemical.

 

is that you again yellen you fat ugly cunt??

yogibear's picture

"is that you again yellen you fat ugly cunt??"

It ain't over until the fat lady sings.

MASTER OF UNIVERSE's picture

The Fat Lady already sang her lungs out back when Lehman Bros. was entering Chapter 11. It was an outdoor Opera singer [she was Phat/Fat]in a Central Park amphitheater. She was a 'Queen of Fat' Ladies and she sang beautifully IMHO, but I am no expert on Operas.

 

NOTE: One can view the Fat Lady singing if you watch _The Fall of Lehman_ BBC or _Fall of Lehman Brothers_ BBC documentary.

or

_The Love of Money: The Bank That Bust The World_ BBC

OutaTime43's picture

They have $10 billion for buybacks but no money for 1750 wages? How about putting some of that $10 billion into production improvements and keep the people instead? Where's the ingenuity?

NoDebt's picture

There is no growth.  There won't be any growth for a long time.  Nobody needs to build a better mouse trap because the market is saturated with them and the greatest ROI for your capital these days is:

1.  Lobbying government to erect barriers of entry against competitors.

2.  Share buy-backs.

Why we don't just count share buy-backs as R&D by now completely escapes me.  It's such an obvious route to make everything look healthier (on paper) I can't believe nobody's tried it yet.

firstdivision's picture

1750 people just went from willing and able to work in the capitalist system, to relying on the socialist system.  The beauty of it is that the 1750 people's wages and benifits is far eclipsed by the salary of the failing CEO that is running the company into the ground.  Capitalism in full effect.

Monetas's picture
Monetas (not verified) firstdivision May 4, 2015 9:18 AM

Blame the kid .... for his leukemia ?

GMadScientist's picture

Blame the parents....for feeding him lead?

Monetas's picture
Monetas (not verified) GMadScientist May 4, 2015 9:33 AM

Better lead .... than dead ?

GMadScientist's picture

Ingesting too much lead can ruin your ability to think, yes.

forexskin's picture

that ain't capitalism.

that's a mega corp dying a slow death, and taking down a lot of the productive economy because of:

A SYSTEM OF CRONY FRAUD

cigarEngineer's picture

Irresponsible levering up is good. It allows these large behemoths to fail, collapse, and for nimble upstarts to compete in their place.

Oh wait, did i say "fail?" Sorry. I meant "get bailed out."

firstdivision's picture

Same story as every company in this fucking country.  Seriously, these people bitch about those on government benifits, these CE-LMNOP's all are on shareholder benefits.  Boards are about as effective as the SEC.

Of course, it also didn't hurt that as a result of the buybacks, shareholders were ok with a 30% jump in the CEO's compensation despite a consistent decline in DOW's net income.

Monetas's picture
Monetas (not verified) firstdivision May 4, 2015 9:28 AM

150 million or more .... entitled brats .... adds up to some serious money .... if the Russian army was on the outskirts of Berlin .... you would just sit there like a good German ?

Bastiat's picture

The end is a few corporate officers borrowing money, buying stock and paying themselves bonuses.   They could sell all the property and do it from home.

Catullus's picture

It's not money laundering if it's a "share repurchase"

SirBarksAlot's picture

The geniuses at the top have written a few new recipes into that cook-book this century!  Just wish I could try them at home.

taketheredpill's picture

 

 

Dupont did the same thing a few months ago, also to keep Nelson Peltz happy.  My sister in law, turfed after 14 years...not so happy.

 

Monty Burns's picture

She's not of the Tribe obviously as Nelson would have looked after his own.

Monetas's picture
Monetas (not verified) May 4, 2015 9:11 AM

The NWO .... government employees on the top, under them is the entitlement flash mob .... at the bottom .... the ex-middle class turned burger flippers .... working until they die !

BoPeople's picture
BoPeople (not verified) Monetas May 4, 2015 9:15 AM

There are many worse things than working until one dies.

NoDebt's picture

That's what I keep telling myself.

Monetas's picture
Monetas (not verified) NoDebt May 4, 2015 9:26 AM

Wait until a "Mike Tyson" reaches across the counter .... and punches your mother .... in the face ?

BoPeople's picture
BoPeople (not verified) May 4, 2015 9:15 AM

Greed... the harbinger of the death of the human spirit. Man does not need greed to survive and thrive. It is an artifact of fear that darkens the soul.

Monetas's picture
Monetas (not verified) BoPeople May 4, 2015 9:39 AM

The greed of a welfare cheat .... dwarfs the greed of a CEO .... in relative terms .... all things considered !

WillyGroper's picture

Malarky!

The CEO's are the biggest recipient of welfare dwarfing humans exponentially.