20 | capitaregistrars.com
THE BIG DEBATE
HAS THE DIVIDEND
Vodafone made history last year when they announced that they would
no longer pay dividends by cheque. With cheques themselves due to be phased out in 2018, will other issuers promptly follow Vodafone’s lead? Registration Matters sought the opinions of a few interested parties
The newly listed firm
DEAN CLARKE
Company Secretary Gartmore
What’s your current view about removing cheques for dividend payments? Have you made any moves to prepare for it? We amended our Articles pre-IPO to enable us to pay dividends without cheques. The move to pay dividends electronically is inevitable and to be welcomed.
What do you see as the key benefits for you and your shareholders? Which of these is most important to
you as a company?We have a small shareholder base so for us the cost and environmental concerns are minimal. Our retail business requires us to send cheques out to clients and cheque fraud is a real issue. We will not be paying dividends by cheque mainly for this reason. It is also the 21st century – why would we want to send cheques unless we had to?
Have you come under any pressure from shareholders to reduce the use of paper generally?
We are newly listed with a small shareholder base so we have not had any pressure from investors. Nor should we wait for them to pressure us to do so – we look to minimise the use of paper and recycle wherever we can.
SPRING 2010
It is the
21st century – why would we want to send cheques unless we had to?
If you were to stop using cheques for dividend payments, would you also review how you distribute
tax vouchers? Yes, we would. I already get my bank statements online – why not tax vouchers?
How do you expect other companies to approach the issue and will market trends have any impact on
your own decisions? We saw what Vodafone had done and can recognise a great idea when we see it – we made sure we had the power to pay dividends without cheques in our Articles pre-IPO. Some firms with a large retail shareholder base may get some pushback but the cost savings will be enough to get the necessary amendments to their Articles passed. If I can be cynical for a moment, this will be seen as a quick win to put in the corporate responsibility review in the annual accounts. This in itself could start a flurry of Article amendments being put forward during the AGM season next year. I expect in three to five years any dividend being paid by cheque will be seen as quaint and from a bygone era.
The shareholders’ champion
ROGER LAWSON
Former Communications Director UK Shareholders’ Association
What do you see as the benefits for shareholders of companies
moving to an electronic payments system rather
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