Royal Bank has announced:
amendments to its dividend reinvestment plan (the “plan”).
Under the plan, the bank may now offer a discount from the average market price (as defined in the plan) on the reinvestment of dividends in additional common shares issued by the bank from treasury and will provide the preferred shareholders of the bank with the opportunity to participate in the plan by electing to have the dividends paid on their preferred shares reinvested in common shares of the bank.
Under the plan, common and preferred shareholders who reside in Canada and common shareholders in the United States may elect to have dividends paid on their shares reinvested in common shares of the bank.
At this time, the bank has decided to issue shares from treasury at a three per cent discount from the average market price until such time as the bank elects otherwise. Most recently the common shares purchased under the plan have been issued from treasury with no discount to the average market price. These changes will be effective starting with the dividend, payable on May 22, 2009 to common and preferred shareholders of record on April 23, 2009.
Under the old plan (not yet modified on RY’s website), preferred shareholders could not participate.
I can see nothing in the 2008 Annual Report to indicate to what degree shareholders are participating in this. In the great scheme of things, I will assume “not much”, since with no discount there has been little or no reason for institutional shareholders to participate.
A 3% discount though – with preferred share eligibility – could make things more interesting.
Thanks to Assiduous Reader DD for bringing this to my attention!