Learn something new every day
More Info... by email
Share perks are special benefits given by companies to individuals who own shares of stock in those companies. These perks can range from discounted services to special gifts, depending on the nature of the company offering them. Such perks should not be confused with dividends, which are cash payments periodically sent out to investors when a company is performing well financially. Companies use share perks to entice potential,but often discontinue them in times of financial hardship as a way of cutting costs.
Many investors who invest in companies simply do so in the hopes that those companies will do well and improve their fortunes, thereby increasing the value of the shares owned by the investors. Other investors are aware of the fact that some companies offer special benefits to their investors as a reward for their investment capital. These share perks vary in size and style, but they can be an effective way for companies to improve the perception of their stock's value to shareholders.
It is important to understand the guidelines that individual companies have when issuing share perks. For example, some companies require that a minimum amount of shares be held or that the shares must be held for a certain amount of time. Other companies may require that shareholders attend special investor meetings at which the perks are issued. In some cases, companies are more lax with their requirements so that they can attract more potential shareholders.
The types of share perks differ according to the companies that offer them. For example, a company that runs a chain of coffee shops might offer its shareholders coupons or gift cards that allow them to purchase coffee at one of the company's shops. Another example would be an airline that gives shareholders discounted flight opportunities or free frequent flier miles to be added to their account. Many companies come up with creative ways to reward their investors and to encourage them to keep the investment money coming.
In times of financial upheaval, companies may not be able to afford share perks that they had offered in the past. When its bottom line becomes strained, it may be incumbent on a company to find ways to save money, and cutting out these perks would certainly achieve that. Still, the companies that can afford them often use the perks as a way to make it seem that investors are getting the most out of their investment capital.