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The Disney dividend is back.
After a suspension of more than three years, The Walt Disney Co. will bring back its dividend payments to shareholders.
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The company announced Thursday that it will pay a dividend of $0.30 per share for shareholders of record as of Dec. 11. The payments will be made in January.
“This has been a year of important progress for The Walt Disney Company, defined by a strategic restructuring and a renewed focus on long-term growth,” said Mark Parker, chairman of the Disney board, in a statement. “As Disney moves forward with its key strategic objectives, we are pleased to declare a dividend for our shareholders while we continue to invest in the company’s future and prioritize meaningful value creation.”
Disney suspended its dividend in 2020, as it was reeling from the COVID-19 pandemic after its theme parks were closed and most productions shut down. The activist investor Dan Loeb called on the company at the time to suspend the dividend and “double” its streaming budget, arguing that it would turbocharge Disney+.
“By reallocating a dividend of a few dollars per share, Disney could more than double its Disney+ original content budget,” Loeb wrote at the time.
Disney ultimately listened to Loeb, and poured billions into streaming content.
Disney’s last dividend, which it issued in Dec. 2019, was for $0.88 per share.
However, bringing back the dividend has been a priority for shareholders and for CEO Bob Iger, who promised in February that the dividend would be back by the end of 2023.
The company has been slashing costs (it now says it has generated $7.5 billion in cost savings), and restructuring itself in a bid for stability and profitability. While the dividend is an expense for the company, it is also a sign that the company believes that it is entering a period of stability, or even growth, and can afford to pass its profits on to shareholders.
Now, of course, the company is grappling with another activist in Trian founder Nelson Peltz. In conjunction with the dividend, the company also adjusted its bylaws to make tweaks related to the nomination of new directors (Peltz is going to seek board seats in a proxy fight). The changes, while not enormous, will add some friction to the process.
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