The number of companies offering shareholders special benefits, including compact discs and gold coins, has been increasing and now stands at three times the figure a decade ago.
Faced with a sluggish stock market amid the prolonged recession, companies are desperate to attract more individual investors and shore up their share prices.
Many have turned to special benefit plans for shareholders, providing discount coupons or complementary tickets for their products or services.
Game and prize maker Banpresto Co. in Tokyo, a subsidiary of toy maker Bandai Co., offers its stuffed dolls to shareholders.
“We offer different (stuffed) dolls or animals as a Christmas present every year,” Banpresto President Tsuchita Goka said.
Tokyo-based record company Avex Inc. offers a limited edition of CDs, commodity futures trader Globaly Corp. in Nagoya offers gold coins, Japan Pulp & Paper Co. in Tokyo provides rolls of toilet paper, and graveyard developer Nichiryoku Co. in Tokyo gives a discount on graveyard- related work.
According to the “Shareholder Special Benefit Catalog for fiscal 2003” prepared by Daiwa Investor Relations Co., a Daiwa Securities Group Inc. company, of the 3,609 companies listed on the Tokyo Stock Exchange or other bourses in Japan as of the end of November 2001, 748 had adopted a special benefit plan, accounting for 20 percent of the total.
By type of business, retailers accounted for 30 percent of the companies that have adopted such plans.
“There are (also) many companies that do not disclose information on their benefit plans,” said an official of Daiwa Investor Relations.
In 1992, companies offering such plans numbered just 247.
For companies, a shareholder benefit plan can be a means to attract more individual shareholders, often viewed as stable and long-term investors.
Also, compared with a company increasing its dividends, which requires a resolution at a general shareholders’ meeting, a shareholder benefit plan can be adopted by a decision at a board meeting.
For some shareholders, receiving a special benefit directly from the company makes them feel more positive about the firm.
Also, some investors say that in an era of historic-low interest rates, such a plan might even be considered a “new type” of investment.
In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.