Dividend payments and share incentive plans

onlyroz

I have been paying into the company Share Incentive Plan for over a year now, and I have received a number of dividend payments on my investment. However, I have only ever received a whole number of dividend shares and I was wondering what should happen to any fractional dividend payments.

For example, if the company share price is £10 and I hold £1000 in shares, and the company announces a dividend of say 52p a share then that would entitle me to £26 in dividend payments. So I receive two shares at £10 each, but what happens to the £6? Do I lose it? Or is it carried over to the next dividend payment? Or should the company pay me the £6 in cash?

At the moment it seems like these fractional amounts seem to be disappering into thin air, but I'd like to clarify what *should* be happening to them before I question it with the company.

Niv

As I understand it, the 'left over' is carried across to your next purchase period so if you say invest £15pm that £6 would add to it and the next time shares were purchased you would get 2 with £1 carried over to the next month etc. and so on

onlyroz

I have not seen any evidence of "leftover" dividends bein carried over to the next purchase period for previous dividend payments. I think I'll contact HR for clarification.

Niv

onlyroz wrote: »

I have not seen any evidence of "leftover" dividends bein carried over to the next purchase period for previous dividend payments. I think I'll contact HR for clarification.

Well worth the call. I know a scheme that runs this sort of share-save and know that it does work this way with some. It may be that you have to opt into it otherwise the funds just sit there maybe? Either way - hope you sort it.

Vortigern

onlyroz wrote: »

I have been paying into the company Share Incentive Plan for over a year now, ...

My former employer's SIP was administered by the the Halifax. I could log in to my employee shares account and see the numbers of bought shares, free shares, dividend shares etc. I could also see the small amount of cash carried forward after dividend shares were bought.

Can you log in to your employee shares account?

somethingcorporate

Vortigern wrote: »

My former employer's SIP was administered by the the Halifax. I could log in to my employee shares account and see the numbers of bought shares, free shares, dividend shares etc. I could also see the small amount of cash carried forward after dividend shares were bought.

Can you log in to your employee shares account?

I have the same. I can see each amount brought forward at the end of the purchase.

OP, assume the question applies when you purchase shares each month - I pay in £300 a month and each month it buys the nearest amount of whole shares and carries forward a balance.

onlyroz

Yes, I can log into the account, and there is a monthly cash balance carried forward each month - however, I can't see anything in this monthly balance that relates to any spare cash after the dividend payments. I've asked HR and they're forwarding the question to the company that is managing the scheme.