dividend

In business, the amount of money that company directors decide should be taken out of net profits for distribution to shareholders. It is usually declared as a percentage or fixed amount per share. The dividend, in the form of cash or shares, is recommended by the board and approved by the shareholders at the annual general meeting. A dividend payment is not guaranteed and may be withheld for many reasons including poor performance. Shares bought with the right to receive a declared dividend payment are said to be cum-dividend and those without the right are ex-dividend.

The percentage of after-tax profits paid out in dividends ranged in 1991 from 13% in Germany to 60% in the UK; Italy 55%, France 42%, Japan 28%. The UK figure had risen sharply from 17% in 1979 (France 39%, Japan 24%, Germany 9%).

Most companies pay dividends quarterly; others once a year.