A majority of business leaders expect President-elect Trump and Capitol Hill will find a way to bring cash held by corporations overseas back to the United States. But when it comes to the possibility of repatriating the $2.5 trillion held by U.S. corporations overseas, CFOs have a strong message for Trump and Congress: Don't tell us how to spend it.
Nearly 60 percent of U.S. respondents to the CNBC Global CFO Council survey believe that a cash repatriation holiday will occur in 2017. President-elect Trump has proposed a tax rate of 10 percent on overseas money brought back to the United States.
But CFOs overwhelmingly disagree with the idea that the government should dictate how the cash is spent — in particular, any prohibition against the money being used for stock buybacks.
Seventy-five percent of CFOs said they disagreed with the statement "Companies should not be allowed to use repatriated cash for stock buybacks."
The last time the government offered a tax holiday on offshore profits, in 2004, use of the cash for stock repurchases was prohibited, but companies were able to work around that restriction and increase buybacks at the time, studies found. Overall, there were few signs of increase in domestic investment or hiring as a result of the flow of cash back to the United States, according to a 2011 congressional analysis.
Only 12.5 percent of CFOs indicated they would use repatriated cash to increase head count.
(See full drop-down menu of charts with CFO responses to cash repatriation questions below.)
While voicing disapproval for any limit on share repurchases, CFOs indicated that corporations do not have a detailed plan yet for a potential flood of repatriated cash. Only about 36 percent of U.S. CFO Council members say they have a specific plan on how to spend it.
Twenty-eight percent of CFOs did identify strategic M&A as their top capital allocation priority for 2017, followed by R&D and new buildings, equipment or property.
The CNBC Global CFO Council represents some of the largest public and private companies in the world, collectively managing more than $4 trillion in market capitalization across a wide variety of sectors. The quarterly CFO Council poll was conducted from Nov. 28 through Dec. 6.
Despite all the chatter about overseas cash, a little less than 18 percent believe a repatriation holiday should be the top priority for the incoming Trump administration.
The consensus among CFO Council members from around the world is that corporate tax reform should be President-elect Trump's first order of business.
Nearly 95 percent of respondents said corporate tax reform will have a positive effect on their company, followed by infrastructure, at nearly 75 percent.
Complete survey results below:
(Note: Thirty-nine of the 106 current members of the CNBC Global CFO Council responded to this quarter's survey, including 23 U.S.-based members. Members represent a diverse mix of public and private companies from around the world, with more than $4 trillion in market capitalization.)