Back when DRIP programs were rolling out in the 1960s and 1970s, one of the advantages typically offered in such programs was a 5%, 10%, and in some rare cases of budding blue-chips, 15% discount on dividend reinvestment for those investors holding the stock.
The whole point of it was to encourage and incentivize people for thinking like long-term business owners. Also, it was a way to shift the accumulation of company stock away from the folks in New York that tended to want results now towards a more genteel and understanding owner base that would be patient with management when business conditions thwarted companies from achieving expected growth. This was a strategy pioneered by Richard Joshua Reynolds (the Emory graduate who owned the RJ Reynolds tobacco company) who hated Wall Street folks buying up bits of his company and used the promise of special cash payout structures for employees … Read the rest of this article!
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