Good or Bad? - A poll....

[nottiger]

[?]Came upon this clause the other day in a shareholders agreement:

The Shareholders agree that Deleted Ltd will distribute a small percentage of net profit, after tax, 3%, to humanitarian and/or environmental causes agreed by the Board each year.

This profit distribution provision above will survive this agreement and only terminate in the event that Deleted Ltd ceases to operate.


If the investment met your criteria in other respects would you view this clause as good or bad?[?]

[Scooter]

Good if the money is targeted

[Paper Tiger]

If you believe the company is a good investment then the fact that it gives part of the profits away is neither here nor there.

Many (most?) companies support charities etc one way or another and do not publish the fact.

Personally I believe giving to charity is a good thing that everybody should do.

[craic]

Bad. I decide which, if any, charity to support with MY money. CEOs can dip in their own pocket if they want to get on the Honours List. 3% may not seem much but it moves a company up or down in my equation of whether or not to buy, sell or hold. I do not have a figure for charitable donations in my equation.

[Bobby]

Companies must disclose all donations in their annual report Paper Tiger

[MeNoBatty]

SOunds like you are investing in some sort of organics/natural products supplier/retailer or a company that is trying to have a green brand.

Its ok so long as it is in context and will add to either the brand or the shareholders feeling good about themselves. No good if it is by some self seving CEO/board with wacko ideas on what is a charity. In the end, it is no different to a company stating it will distribute 50% of its tax paid profits as dividends, some people prefer all profits to be reinvested in the business - at least they are stating it up front.

And they have to make a profit first which is more relevent to making an investment decision ;)

[Steve]

Donating to charity is good, but I would prefer to do it personally rather than thru a company in which I have invested in.

[Placebo]

Sometimes they amount to the same thing[:p]