FT, 9 April 2020, Dividend Payments at Risk

ShareSoc Director, Cliff Weight, is quoted in the following article: https://www.ft.com/content/12e2a225-a6ff-4375-847f-6ee3499df9a2

Though the dividend cuts may be unpopular with some investors looking to draw income, Cliff Weight, director of shareholder advocacy group ShareSoc, said it was better for companies to conserve cash rather than risk going bust.

Investors should not be dependent on income from investments, Mr Weight added. “You should have a sufficient cash buffer so that if the worst does happen then you’re not financially destroyed.”

Cliff clarifies his remarks in the comments section beneath the article:

Let me clarify my quoted comments, for the benefit of Angelus and others. My position on investing is that asset allocation is crucial. Do not have all your eggs in one basket. Have a good buffer of cash, just in case.

Well run companies who have regular shareholder engagement meetings with shareholders (as do HSBC, BHP, GSK, Vodafone, L&G, etc) will receive a sympathetic response to whatever decisions they make. Companies who have not established trust with their shareholders will struggle with these decisions and the idea of limited information flows, closed AGM meetings, etc will be viewed with great suspicion: such behaviour is liable to provoke big share price swings.

Here are some of my blogs on the crisis. https://www.sharesoc.org/blog/investment-strategies/discussion-paper-what-do-we-do-now-covid-19-implications/ https://www.sharesoc.org/blog/remuneration/leaders-need-to-set-an-example-over-pay/ https://www.sharesoc.org/blog/frc-fca-and-pra-joint-statement-26-march-2020/

Thank you Angelus for your comments. I suggest you join ShareSoc. We embrace a diversity of views.
https://www.sharesoc.org/membership/full-membership/ Associate membership is free.