American automaker GM has announced a 25% increase to its benchmark dividend payout and a US$6 billion share buyback program - US$2 billion of which will be undertaken in an accelerated repurchase authorisation (ASR).
A quarterly dividend of 15c per share will be paid to shareholders - up 25% from the previous quarterly dividend of 12c which GM says will be the new benchmark for future shareholder bonuses.
Through the ASR program, GM will advance ~US$2 billion to the executing banks to receive and retire GM common stock.
Total shares to be repurchased under the ASR program will be based on the stock price average during the ASR program term and are expected to be wrapped up during Q2 of this year.
“The GM team’s execution continues to be strong across all three pillars of our capital allocation strategy, which are to reinvest in the business for profitable growth, maintain a strong investment grade balance sheet, and return capital to our shareholders,” GM CEO and chair Mary Barra said.
“We are growing our business thanks to our broad, deep, and compelling portfolio of ICE vehicles and EVs - at the same time, we are investing our capital in a disciplined and consistent way to continue generating strong margins and cash flows.”
GM’s CFO Paul Jacobson says the company's business plan and balance sheet remain strong. He says the company "will be agile if we need to respond to changes in public policy”.
“The repurchase authorisation our board approved continues a commitment to our capital allocation policy,” Jacobson says.
2025 capex will remain between US$10-US$11 billion, including investments in the company's battery cell manufacturing joint ventures, with spending on research and product development pegged to be ~$8 billion.
Shares in the almost US$50bn market-capped automaker were up 3.75% on the news, trading at US$48.46 per share at the time of writing.
