The Progressive


A project of Common Dreams

For Immediate Release

Olivia Alperstein,
Carter Dougherty,

New Report Shows Need for Buyback Restrictions in CHIPS Program

Guardrails would protect taxpayers dollars from wasteful stock buybacks and excessive CEO pay and keep focus on long-term innovation.

Computer chip companies currently in line for $30 billion in subsidies spent more than $41 billion on stock buybacks between 2019 and 2023, underscoring the need for stringent rules that ensure new subsidies improve the semiconductor manufacturing base and do not merely enrich shareholders and CEOs, according to a new study.

The report from the Institute for Policy Studies and the Americans for Financial Reform Education Fund, Maximizing the Benefits of the CHIPS Program, analyzes the distribution of the $39 billion in subsidies for semiconductor manufacturing under the 2022 CHIPS and Science Act. It also examines the Biden administration’s initial steps to stop taxpayer money from going to share buybacks by granting preferential treatment to firms that agree to forgo all stock buybacks for five years.

While welcome, this policy is incomplete. With such strong pressure from Wall Street to use stock buybacks to boost share prices, the federal government must lay down a firm line against potential abuse. The authors urge the administration to put real teeth into that effort by inserting explicit restrictions on all stock buyback spending in the final CHIPS subsidy contracts.

“The Biden administration has taken important steps to use the power of the public purse to encourage corporations to focus on creating good jobs and long-term value rather than the all-too-common fixation on inflating CEO paychecks,” said Sarah Anderson, the report’s lead author and the Global Economy Program Director at the Institute for Policy Studies. “Strong stock buyback restrictions in CHIPS contracts would reinforce this goal, since every dollar spent on buybacks is a dollar not spent on innovation for long-term competitiveness – the main goal of the law – or employee child care subsidies, worker wages and training.”

The new report is the first to provide detailed data on stock buybacks and CEO pay at the first 11 corporations to sign preliminary CHIPS agreements with the Department of Commerce. These companies are in line for subsidies totaling nearly $30 billion.

The analysis focuses on the $39 billion in subsidies for semiconductor manufacturing in the 2022 CHIPS and Science Act, and specifically on the Biden administration’s decision to grant preferential treatment in the awarding of these subsidies to firms that agree to forgo all stock buybacks for five years.

The report commends Biden administration officials for their strong commitment to ensuring that public investments benefit working families and the broader economy instead of further enriching corporate executives and wealthy shareholders. The authors urge the administration to put real teeth into that effort by inserting explicit restrictions on all stock buyback spending in the final CHIPS subsidy contracts.

Key findings:

  • The 11 companies with preliminary CHIPS agreements spent more than $41 billion on stock buybacks between 2019 and 2023 — enough to provide 300,000 employees a $27,541 bonus every year for five years.
  • Intel had the largest outlay. With the $30.2 billion the firm spent on buybacks from 2019 to 2023, the chipmaker could’ve given each of their 124,800 employees a $48,000 bonus every year. Intel is in line to receive as much as $8.5 billion in CHIPS subsidies – the most of any firm.
  • None of the companies in line for these subsidies have publicly committed to suspend existing share repurchase plans (which currently authorize $14.3 billion in buyback spending) or to refrain from adopting new plans during the grant period.
  • CEOs with preliminary CHIPS agreements are sitting on company stock holdings worth more than $2.7 billion ($306 million on average), reflecting the enormous potential for executives to cash in on future buyback-related bumps in share prices.
  • Among the 8 CHIPS grantees for which pay data are available, CEO compensation averaged $13.6 million in 2023 and the average gap between CEO and median worker pay stood at 200 to 1.
  • Micron Technology’s CEO was the highest paid, with total compensation valued at $25.3 million in 2023. Half of Micron employees made less than $54,570.
  • Microchip Technology’s median wage was the lowest, at just $51,229. The firm’s CEO made nearly $12.3 million last year amidst declining revenue that has led to two unpaid worker furloughs this year.

In a July 1 letter to Commerce Secretary Raimondo, Senator Elizabeth Warren and House members Pramila Jayapal, Sean Casten, and Bill Foster noted that the federal agency has the “statutory authority to fully ban CHIPS grant recipients from engaging in stock buybacks as a condition of award.” The lawmakers expressed concern that unless the administration asserts this authority, they will “leave the door open for semiconductor companies to take millions or even billions in CHIPS grants, move some money around, and then engage in more stock buybacks.”

“Congress passed the CHIPS and Science Act and President Biden signed it into law to bolster semiconductor manufacturing in the U.S. – not to waste public dollars in stock buybacks that make rich executives richer and exacerbate economic and racial inequality,” said Natalia Renta, Senior Policy Counsel for Corporate Governance and Power at Americans for Financial Reform Education Fund. “Commerce Secretary Raimondo must finalize CHIPS contracts with strong stock buyback restrictions to make sure public money serves the public good, as intended, not narrow, private interests.”

Read the full report:

The Institute for Policy Studies, a multi-issue research center, has been conducting path-breaking research on executive compensation for nearly three decades. IPS’s website provides an online portal into all things related to the income and wealth gaps that divide us, in the United States and throughout the world. Sign up for our weekly newsletter at:

Americans for Financial Reform Education Fund is a nonpartisan, nonprofit coalition of more than 200 civil rights, community-based, consumer, labor, small business, and other groups. Formed in the wake of the 2008 crisis, AFREF works to lay the foundation for a strong, stable, and ethical financial system – one that serves the economy and the nation as a whole and contributes to shared prosperity for all families and communities.

Institute for Policy Studies turns Ideas into Action for Peace, Justice and the Environment. We strengthen social movements with independent research, visionary thinking, and links to the grassroots, scholars and elected officials. I.F. Stone once called IPS "the think tank for the rest of us." Since 1963, we have empowered people to build healthy and democratic societies in communities, the US, and the world. Click here to learn more, or read the latest below.