The chief executive officer of Canada’s second-largest auto-parts manufacturer says she could not justify paying a full dividend to shareholders while employees were losing their jobs in wake of the COVID-19 pandemic.
“It didn’t feel right that we pay a full dividend to our shareholders when we had thousands of people who were laid off and feeling the impact of this,” Linamar Corp. CEO Linda Hasenfratz told BNN Bloomberg’s Jon Erlichman Friday.
“I felt like: We’re all in it together, we’re all going to take a bit of a hit here. And we’ll get that restored just as soon as we can.”
Linamar said Thursday it is slashing its payout to shareholders in half to $0.06 per share when it reported first-quarter financial results.
“It’s a small number, it doesn’t move the dial very much in terms of liquidity,” Hasenfratz said.
The Guelph, Ont.-based company said sales plunged a little more than 20 per cent in the first quarter, primarily due to “adverse conditions” caused by COVID-19.
Linamar is far from the only Canadian company that has cut its payout during the pandemic. H&R Real Estate Investment Trust said Thursday it is slashing its distribution by 50 per cent. Meanwhile, some energy companies have been reducing their payouts as well, including Birchcliff Energy Ltd. which announced earlier this week it is cutting its quarterly dividend to half a cent.
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