Apple Announces New Dividend Plans

On 19/03/2012, Apple Inc. announced plans to initiate its first dividend payment and share repurchase program since 1995. The decision marked a shift from the company’s long standing policy of not returning cash to shareholders during the period led by co founder Steve Jobs. Apple stated that it would begin paying a quarterly dividend of $2.65 per share, with payments scheduled to start in the fourth quarter of fiscal 2012 beginning 01/07/2012. Based on Apple’s stock price at the time, the dividend represented an approximate annual yield of about 1.8 percent. Apple also authorized a $10 billion share repurchase program. The company said the buyback would begin in fiscal 2013 starting 30/09/2012. Apple stated that the primary purpose of the repurchase program was to offset dilution from future employee equity grants and stock based compensation. The company noted that the combined dividend and repurchase plan was expected to total approximately $45 billion over the first three years. The announcement followed a period of strong financial performance and growing cash reserves. Apple indicated that the capital return program would not limit investment in research, product development, acquisitions, or strategic opportunities. The 19/03/2012 decision represented the company’s first shareholder payout initiative in more than a decade and introduced ongoing dividend payments to Apple investors.