Aerial view of the La Défense business district, near Paris, home to many large groups. - MARIO FOURMY / SIPA

  • In the midst of the economic crisis linked to the coronavirus, certain companies have not renounced dividends.
  • The government has not issued a formal ban for those who resort to short-time working.
  • Activities and opposition MPs are demanding an order banning the payment of dividends.

While the executive - and the companies - ask many efforts to the employees during the coronavirus crisis (setting of holidays, RTT, reduction of wages), some unions like the CFDT also ask the shareholders to do their part, by renouncing to receive the dividends calculated on the 2019 results.

The sums would be kept by the companies, which would allow them to have more financial reserves. In response to this request for solidarity, the government has established a framework that does not satisfy everyone. 20 Minutes takes stock.

What are the rules set by the government?

The executive acts on two fronts. First, companies that would resort to partial unemployment - more than 337,000 are concerned today in France - were invited by Bruno Le Maire "to the greatest moderation" in the payment of dividends. The Minister of the Economy indeed recalled Monday that the employees with partial unemployment “were paid by the State”, which fully compensates for the cost borne by the company. "Be exemplary," he said to the shareholders concerned. But nothing prevents them, in law, from ignoring the ministerial request.

The government, on the other hand, was more direct for companies which would have benefited from a deferral of charges, for example by not paying social security contributions in March, or who would have applied for a loan guaranteed by the state. In the event that they pay dividends, they "will be obliged to repay this cash advance on social and tax charges with an interest penalty" warned Bruno Le Maire. "It is not illogical that a company which requests the deferral of charges, and which is therefore faced with a cash flow problem, does not pay dividends" agreed the boss of Medef, Geoffroy Roux de Bézieux, interviewed by Wansquare . Finally, the State, itself a shareholder in several large companies (EDF, Aéroports de Paris, Engie, Airbus, etc.), has announced that it will vote against the payment of dividends in these companies this year.

In support of this statement, the European Central Bank (ECB) last week asked banks - which do not necessarily benefit from public aid - to also renounce paying dividends. This renunciation could free up no less than 30 billion euros of capital, said Andra Enria, the European "policeman" of banks. This retained capital instead of being distributed could be used "to support households, small businesses and borrowing companies", and also "absorb losses on existing exposures to these borrowers", explains the ECB in its press release.

How have companies reacted?

They are not at all on the same line. First there are those who will not pay any dividend for the year 2019. Concerning the companies where the State is a shareholder, Airbus and Safran have already made this choice. Others, such as JCDecaux, Tarkett, Autogrill and Auchan Holdings, will imitate them. As for the banks, Natixis and Société Générale are following suit, even if SoGé does not rule out paying an "exceptional dividend" at the end of the year.

Second, some companies have chosen to reduce shareholder compensation. The transport operator Transdev, publicly controlled via the Caisse des Dépôts, will thus pay a total dividend of 23 million euros, half of its 2019 profit, but only after the coronavirus crisis has ended. The equipment manufacturer Plastic Omnium will for its part reduce its dividend by 34% compared to the previous year, and the giant of pens, razors and lighters Bic will also cut it by a third, to 1 euro per share.

Finally, some companies have publicly stated that they are giving up taking advantage of the plans provided by the government ... which will allow them to pay dividends as they see fit. This is the case for Hermès, L'Oréal, and even Total. According to "Les Jours", the oil group will distribute 1.8 billion euros to its shareholders. As for Publicis, the dividend paid this year will even be up (+ 8.5%) compared to last year.

Does the position of the executive satisfy everyone?

No, of course. Tuesday, PCF MP Elsa Faucillon demanded an order to block the payment of dividends or share buybacks (a technique to compensate shareholders without paying dividends) in large groups. A position also shared by Oxfam: "In a very clear and immediate manner, the government must freeze all dividend payments in 2020, a fortiori for companies that benefit from public funds".

But not surprisingly, the government does not intend to go further than the position expressed by Bruno Le Maire, which leaves companies some leeway.


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  • Economy
  • Dividend
  • Coronavirus
  • CAC 40
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