Dividends: The New Lightning Rod for Political Anger
Companies face backlash after persisting with payouts while asking for government help 04 April 2020
Attracta Mooney from the Financial Times covers SquareWell’s Stewardship Guidance as well as its Market Update memo to uncover investor responses to this year’s mostly hotly debated governance topic in light of Covid-19, dividends.
As the Article points out, if bankers’ pay was the lightning rod for political anger during the financial crisis, dividends are rapidly assuming a similar role in the coronavirus outbreak. Those governments hurriedly assembling economic rescue packages have made clear that any company wanting to use them must stop payouts to shareholders. European and UK regulators this week extended the message to banks, telling lenders that their financial firepower should be used to support economies.
The mushrooming concern over how companies use their cash partly reflects the sudden and devastating damage that efforts to contain the outbreak have inflicted on workers. In the US alone, the number of people claiming unemployment benefits has soared to a record 6.6m.
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