Profit distribution policy

Profit distribution policy is an important task of financial management. If the objectives of the shareholders and management coincide or if there is a personal identity between these groups, as is usually the case with sole proprietorships, partnerships and sometimes also with corporations, the problem becomes more concrete in the question of whether, from the point of view of the shareholders, the profit remains in the company (self-financing) or its distribution in the private sphere seems advantageous. For the answer, it is important, on the one hand, to what extent there are profitable uses, i.e. investments, for the retained capital at the company level; on the other hand, the possibility of the individual partner plays
Investing capital withdrawn from the company profitably at the private level, i.e. the investment opportunity, plays an essential role.
The decision-making field is expanded by the fact that non-emissive companies may be dependent on retained earnings to finance their growth, also because the lenders make their limits and their interest claims dependent on sufficient equity (financing rules). Problems can arise here if the shareholders are dependent on the profit withdrawals to cover their private consumption.

A different situation arises in the case of stock corporations whose management is not determined by controlling shareholders. The executive board, which is solely entrusted with the management of the company, also essentially decides on the use of the profit generated. As long as the legal reserves do not amount to 10% of the share capital, he is obliged to transfer 5% of the annual surplus to this reserve (Section 150 AktG). Normally, the management board and the supervisory board are authorized to transfer up to 50% of the annual surplus to the revenue reserves in advance (Section 58 (2) AktG); The general meeting decides on the use of the remaining balance sheet profit on the proposal of the board of directors.

A primary goal of financial management is to minimize the company's cost of capital. With regard to this, the interests of the shareholders are of great importance. Neglecting them would lead to an increase in the cost of capital, because the use of the capital market, for example through capital increases, would only be possible for the company under worse conditions in the future. It seems realistic to assume that investors are interested in the highest possible dividend payments (so-called dividend thesis), ie they will give preference to secure profit distributions today over uncertain profit increases tomorrow.

Aus Sicht der Theorie und unter Annahme bestimmter Prämissen (informationseffizienter und vollkommener Capital market, homogene Erwartungen der Anleger hinsichtlich Rendite und Risiko von Aktien) müssten die Anleger der Gewinnverwendungsentscheidung indifferent gegenüberstehen, weil die Einbehaltung einer Dividende zu einer gleich hohen Kurssteigerung führen müsste (sog. Gewinnthese). In der Realität ist diese Kurssteigerung jedoch unsicher, da die Prämissen der Gewinnthese nicht erfüllt sind. Aus Sicht des Unternehmens und seines Vorstands ist die Selbstfinanzierung durchaus attraktiv.

In times of inflation, it is responsible for maintaining the substance; Any additional amounts are used to finance company growth, which is relatively inexpensive compared to other forms of financing. In addition, there is the comparatively high security of the financing source "self-financing" against future capital increases or outside capital procurement measures. It ensures that the board of directors has room for maneuver in both investment decisions and dividend payments in low-income years.
An approach that may be of interest for tax reasons is the pour-out-get-back procedure under current tax law. In this case, the profits are first distributed and subject to the individual tax burden of the shareholders, then reintroduced into the company via an ordinary capital increase. In this way, the tax burden of self-financing with 40% corporate tax is avoided; the procedure is always advantageous if the sum of the loads of the pour-out-get-back procedure falls below this rate. The uncertainty about the willingness of shareholders to return the funds received to the company, however, limits the advantages and applicability of the procedure.

In the course of the tax reform 2000, a definitive tax of 25% will be introduced for corporation tax, regardless of whether the profits are distributed or reinvested. Corporate income tax credit will be abolished with the introduction of the half-income method. This means that the pour-out-get-back procedure no longer has any advantage over self-financing. According to the new tax law, withholding is clearly preferred to distribution. This has the disadvantage that the control and allocation function of the capital market is weakened because it is not necessarily only those companies that retain funds that have the appropriate scope for profitable investment opportunities.

In Deutschland überwiegt bisher die Zahlung eines relativ stabilen Dividendensatzes, wodurch es, längerfristig betrachtet, auch zu einer prozentual konstanten Aufteilung des Gewinns in Accumulation und Ausschüttung kommt. Bei nur als vorübergehend eingestuften oder außergewöhnlichen Ergebnisverbesserungen ist es üblich, einen einmaligen Bonus zu leisten oder die Dividende konstant zu halten. Lediglich im Falle einer dauerhaften Steigerung des Unternehmensergebnisses werden die Dividenden erhöht. Diese Dividendenpolitik hat zur Folge, dass den Dividendenzahlungen eine gewisse Informationsfunktion zugesprochen werden kann: Aus einer Dividendenerhöhung können Anleger tendenziell auf eine dauerhafte Steigerung des Unternehmenserfolgs schließen.

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