Jul
12
2010

What are shareholders’ perks?

british airways aircraft

British Airways give their shareholders cheaper flights (photo by lrargerich CC-BY)

When you buy a share in a company you are hoping that the company will be successful and it will offer good shareholder dividends and that the share price will also increase. But many people forget that there are a surprising number of companies which also offer perks and benefits to their shareholders.

Companies offer these benefits as a way of improving their relationship with their shareholders; adding value to the company; and allowing the shareholders to experience their products or services. To increase shareholders attendance at Annual General Meetings, some companies give away discount vouchers to those who attend in person.

The range of companies offering perks is wide and varied, and the minimum shareholding can vary between 1 share and 5,000 shares.* Some companies require a minimum time for holding the shares. This is to prevent you buying shares just to take advantage of a perk and then immediately selling them.

You must check whether you would still receive these benefits if the shares are held in a nominee account, or if you will only receive them if they are held in your name.

Some companies provide vouchers which can only be used on one occasion, while others allow repeat discounts.

Here are just a few examples of what is available.

Travel and leisure companies offering perks include British Airways which offer 10% of any of their published prices for air flights if booked directly with them. You can also book for eight companions, providing you are travelling with them. Eurotunnel gives a 30% discount on tickets for three return journeys. Ideal if you are a regular traveller to France and beyond. Thomas Cook will give shareholders 10% off the latest retail high street price for holidays booked through any of their company brand names.

Staying away or eating can be cheaper. Whitbread supply vouchers for its Premier Inns and other brands under its control such as Brewers Fayre and Beefeater. The Restaurant Group offers vouchers for a 25% discount on meals in its restaurants which include Garfunkel’s and Frankie & Benny’s. While De Vere Hotels offer up to 35% of their B&B prices.

Retail companies provide some benefits to the shopaholic: House of Fraser, Mothercare, Marks and Spencer, and Next, offer varying discounts or vouchers.

Horse racing fans may find that the Arena Leisure’s offer of discounts on admission to their racecourses of interest. While the great expense of buying a new house may be made a little cheaper if you take advantage of Bellway’s and Persimmon’s discounts.

Should you buy a share just for the benefits offered? Looking around, the general advice seems to be, no. You must still look for the potential long-term growth in the company. Do not buy the share just for the perks.

*Minimum amounts and a type of benefit may change. You need to check with the companies.

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