[deleted]
He is elected to represent Denmark by Danes. He would be betraying his duty to his people if he put the interests of foreigners ahead of his own (there's a word for that, and dire consequences). It's refreshing to see.
Denmark: No aid for companies which pay out dividends or are reg. in tax havens
71–80 of 308 posts
Re: Denmark: No aid for companies which pay out dividends or are reg. in tax havens
#72Earlier quoted context omitted.
It's probably a bit more nuanced than that. Dividends are often scheduled months in advance, based on (for instance) last year's profits. Having made a profit last year, and having promised a dividend months before corona doesn't mean you won't be struggling now.
Is the promise of dividends binding? I don’t think so.
To my knowledge, it isn't. There is a date of ownership where the dividend eligibility is determined and then it is paid out a few weeks later. I would imagine those payouts are binding but a planned dividend for June could easily be rescinded without legal penalty. However it is priced into the value of the stock. Slashing dividends will tank the stock price.
C'est la vie.
Re: Denmark: No aid for companies which pay out dividends or are reg. in tax havens
#73Earlier quoted context omitted.
Depends on scale. American Airlines in the US used 80 percent of their profits for several years for share buybacks ($12.5 billion from 2010-2019). Not R&D, not salary increases for workers. Does that deserve a bailout that preserves existing ownership? That’s the target. That sort of behavior should be nuked from orbit. I’d agree it’d be different if your business is small (less than $10M/year in turnover); you’d lo…
That’s the point. You are assuming that every applicant is AA size... the reality is that 99% of businesses are not, and you’re killing those business, their employees, their owners, and their families.
[deleted]
Re: Denmark: No aid for companies which pay out dividends or are reg. in tax havens
#74Earlier quoted context omitted.
Dividend and share buybacks are the same end result, just different mechanisms for enriching shareholders. If you didn’t keep enough cash on hand (because you were shoveling profits out the door), you lose your ownership interest (insolvency with no bailout). These are very reasonable conditions for a nation state bailout.
>> mechanisms for enriching shareholders It's important to point out that "shareholders" could include "managed retirement plans", especially when talking about stocks that pay dividends.
Old people own stuff. Why is that important in this context?
Re: Denmark: No aid for companies which pay out dividends or are reg. in tax havens
#75Maybe I'm not understanding something but why do they consider paying dividends as something bad? They are essentially excluding the majority of businesses using this criteria.
There's a lot of misinformation about this out there. The article does a bad job at explaining it, but companies that take aid cannot pay dividends or buy back stock until they return the aid. This is so that aid is not redirected into the pockets of shareholders and is instead used to keep people employed. >The Government and all parties to the Parliament agree that the extended and extended fixed cost scheme introd…
So why don't these conditions apply to all the aid, not just the aid after 8.8 million dollars?
Otherwise it seems ripe for my company to claim 7 million dollars of aid as unsecured loans, then pay out nice big dividends claiming you are in a strong financial position because you are forecasting lots of business next year, then in 2 years time when the loan repayments become due, go bankrupt.
Re: Denmark: No aid for companies which pay out dividends or are reg. in tax havens
#76Earlier quoted context omitted.
If a company can still afford to pay out dividends it probably isn't really in need of aid.
It's probably a bit more nuanced than that. Dividends are often scheduled months in advance, based on (for instance) last year's profits. Having made a profit last year, and having promised a dividend months before corona doesn't mean you won't be struggling now.
It's actually way simpler than that: the owners of a company facing crisis have the choice between providing it with additional liquidity or putting its future (and thus their stake) at risk. This is the one core manifestation of the risk they are bearing, and for which they allegedly deserve the dividends in the first place.
Getting a dividend for last year's performance is the opposite of providing liquidity. If they get the cash because it was scheduled, they need to immediately put it back. If they take the cash and run, they failed to act in their own interest, and do not deserve to have their investment protected.
Re: Denmark: No aid for companies which pay out dividends or are reg. in tax havens
#77I understand the sentiment behind no aid if you're paying dividends (if you have enough money for dividends then you clearly don't need aid), but I don't see how it can be defined in any way that seems even remotely fair. Is it whether you paid dividends recently in the past? Because remember businesses are supposed to pay dividends -- and you could have been profitable enough to pay a dividend in January but now dee…
Based on the article, it looks like the primary form of aid is zero interest loans. It seems perfectly fair and reasonable to me that you can't pay dividends until you pay back the loan.
Re: Denmark: No aid for companies which pay out dividends or are reg. in tax havens
#78Earlier quoted context omitted.
No, they are not. The vast majority of companies do not pay dividends.
You are correct that the vast majority of publicly traded companies do not pay dividends. However, that is a small minority of all firms and I hope you will find it interesting to learn that many, many small firms' owners (Doctors offices, car dealers, liquor stores, carwashes, etc.) take regular compensation in the form of dividends. Further, I will point that in the United States, if you are an "S Corp" (and millio…
Why do a majority of publicly traded companies not pay dividends? I've noticed before that for many companies by identifier (ISIN, SEDOL, CUSIP, take your pick) that there are no dividend histories.
The only example that I know the reason why is Amazon. [If you buy Amazon stock you either 1) expect dividends at some later stage or 2) plan on selling the stock for a higher price.]
Re: Denmark: No aid for companies which pay out dividends or are reg. in tax havens
#79It's a good common sense start. Companies that pay dividends or make share buy-backs are more vulnerable in a crisis (not only the current one), meaning they are riskier investments. Risk needs to be inversely correlated with reward for the markets to function. Investors in riskier companies deserve to get wiped out, not propped up. Companies registered in tax-havens should have no business applying for EU or US aid.…
Companies that pay dividends
What’s the point of a company that never pays a dividend.
Re: Denmark: No aid for companies which pay out dividends or are reg. in tax havens
#80The dividend rule is dumb. Companies who pay out dividends are actually more responsible businesses, who return capital to shareholders. Just because they generate profits doesn’t mean they are also not in need of aid to maintain operations. Certainly it makes sense to prevent them from issuing future dividends based on aid, but why a businesses ability to return profits to shareholders implies anything about their c…
You can pay dividends after repaying the aid money.