Minority Shareholders Take a Stand: A Strategic Approach to Maximizing Dividends
In recent years, several ordinary general meetings of shareholders have revised, upwards, the dividend proposed by the board of directors. While the Assembly is sovereign and can even change the entire initial agenda, the hypothesis of an intelligent tactic implemented by management cannot be ruled out.
Minority shareholders, present in multiple companies, are increasingly coordinating their actions. The general meeting is a rendezvous that is prepared in advance, with the aim of putting maximum pressure on management. The objective is clear: to secure the highest dividend. The refusal of major shareholders makes these meetings tumultuous, especially with certain well-known investors.
In our opinion, a good approach would be to propose a first dividend in the draft resolution, which is lower than what the company can pay. During the general meeting, and as it is a standard question, the revision appears as a satisfaction of the demand of small shareholders.
Concretely, this enables a period of peace with these shareholders, many of whom are active on social networks. Management avoids a wave of title sales on the market. It can even create one in the opposite direction. Ultimately, if the reference shareholders refuse a greater remuneration of title holders, this revaluation will not pass. And as it touches on the company's treasury, it cannot be taken lightly, except for a few entities for which a few million dinars do not cause concerns. Tunisian managers have learned to manage the market, and it's a good fight.
