The shareholders of the Russian energy giant should go away empty-handed for 2021. This decision caused a massive sell-off, especially among small shareholders. The stock crashes.
The Russian energy giant Gazprom surprisingly paid no dividends for the past year and the stock market crashed as a result.
“The shareholders have decided that in the current situation it does not make sense to pay dividends on the 2021 result,” said Gazprom Vice President Famil Sadygow on Thursday via the state-owned company’s Telegram channel. For Gazprom, the implementation of the investment program with the connection of the Russian regions to the gas network and the increased tax demands of the government are priorities.
Gazprom’s board of directors had previously announced a record dividend of 52.53 rubles per share (currently equivalent to around one euro) in view of the high profit in the previous year. However, this proposal for the distribution of profits was rejected by the owners at the general meeting. The number of dissenting votes roughly corresponds to the number of shares that the Russian state holds in the group. The bonuses for the board of directors, on the other hand, were approved with about the same number of votes.
Small shareholders reacted to the unexpected cancellation of dividends with substantial sales. The share lost more than 30 percent in value within a very short time. The dividend was one of the most important factors for the attractiveness of the share, it said. “The waiver of the dividend payment for 2021 not only deprives investors of the opportunity to request payments for 2021, but also creates risks for future dividend payments,” which is a very negative factor, commented the Russian investment bank BKS.