4 ms·

Can't the remaining shareholders vote to suspend dividend payments indefinitely?

• cma 15y ago
  No; something akin to minority shareholder rights applies.
• chernevik 15y ago
  Yes, but they themselves wouldn't then receive dividends. They could route cash to themselves by issuing other capital instruments, but the corporate by-laws and / or charter should protect minority equity against this. This sort of thing is why you want good lawyers up front. The likelier problem is management controlling the board and creeping up exec comp. There will always be a trade-off between dividend payments and re-investment, but presumably here the voting equity's interests are basically aligned with the non-voting minority.