Investor payouts and job cuts jar with US companies' social pledge

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When Randall Stephenson joined 180 of his peers leading many of the richest U.S. companies in signing the Business Roundtable pledge on the ...

REUTERS: When Randall Stephenson joined 180 of his peers leading many of the richest U.S. companies in signing the Business Roundtable pledge on the"purpose of a corporation" in August 2019, the then-chief of AT&T Inc promised to look out for the interests of all the wireless carrier's stakeholders, not just shareholders.

Miller, who worked in Reseda, California, said he accepted a buyout offer after managers told him he might be laid off later on less generous terms, something he said his local union representatives told him happened to dozens of other employees in the state.AT&T spokesman Jim Kimberly said most of the workforce reductions"were from voluntary departure offers and attrition" and declined to comment on individual cases.

Tim Gaumer, Refinitiv's director of fundamental research, said pledge signatories returned more to investors because they had the ability to do so."It is easier to pay out dividends and buybacks with confidence if your income stream is less volatile," he added. The pledge's lack of detail gave signatories wide discretion in deciding how the pandemic pain would be spread among shareholders, employees and other stakeholders.

Among them, Target Corp raised its minimum wage to US$15 an hour in July from US$13, which was already well above the US$7.25 national level. "The long-term interests of our communities and employees cannot be met without attracting investor capital," AT&T executive vice president Timothy McKone responded in a letter.

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