Shareholder benefits Shareholder benefits on offer
For investors with the risk appetite and funds to invest, there are still some exciting shareholder benefits out there, particularly if they support your lifestyle or hobbies.
British Airways shareholder benefits
The British Airways shareholder discount, for example, is available to investors who own more than 200 shares – and gives a 10% discount on unlimited full-price flights for up to eight people.
For two adults and two children flying from Heathrow to Cairo in July, the regular price – excluding taxes, fees and surcharges – would be £718, so the discount saves you £71.80. You’d need to travel four times to redeem the original cost of the 200 shares (£248).
Irish Ferries shareholder benefits
For two adults and two children travelling by car, a weekend return from Holyhead to Dublin would cost around £370. Ferry crossing prices can fluctuate, but with the 20% discount the fare falls to £296, offering a saving of £74. In this case, you’d need to travel 12 times to meet the cost of the shares before you save money, or 28 times without a car.
More examples of shareholder benefits on offer
The most valuable perk Newbury Racecourse offers its shareholders is two free passes to each and every race day – a benefit worth £550 if bought independently.
However, eligibility for it as a perk requires you to have more than £90,000 worth of shares – so it's not an enticement to buy, but a reward for serious investors.
|Shareholder benefits offered by FTSE 100 companies|
|Company||Sharesa||Benefit||Share price (p)b||Costc||Performanced|
|Associated British Foods||1||Food samples given out at AGM to approx value of £30||774||£8||37%|
|British Airways||200||10% discount for the shareholder and up to eight companions on BA flights||124||£248||-54%|
|British Land Company||1||Invitations to art exhibitions sponsored by the company||372||£4||-36%|
|BT||1||Discounts available on BT products and services, up to 20% off BT branded hardware. Shareholder credit card with loyalty scheme also available||103||£1||-31%|
|Carnival||100||On-board credit per stateroom from £25 (sailings of 6 days or less) to £125 (sailings of 14 days or longer)||1,606||£1,606||-32%|
|Legal & General Group||1||Shareholders and their families receive: 25% discount on home insurance; 12.5% discount on travel insurance; 10% discount on life assurance; 25% buildings and contents insurance. Reduced initial charges of 0% on selected Isas and unit trusts; 1% cashback on selected Isas and 1% extra allocation on selected unit trusts||55||£1||-25%|
|Marks & Spencer||1||A book of savings and discount vouchers offered every year||314||£3||0%|
|Next||500||25% off voucher for one-off purchase||1,512||£7,560||21%|
|Tesco||1||Cards given out annually - in recent years to the value of £7.50||349||£3||52%|
|Thomas Cook Group||500||10% discount from retail high-street price holidays, commission-free currency transaction at Thomas Cook or Going Places||202||£1,008||n/ae|
|TUI Travel||500||Discounts of up to £80 via nine of the travel companies and 13% discount with Hotelopia||226||£1,129||n/af|
FTSE 100 companies providing shareholder benefits. Information correct at 8 July 2009.
Nominee shareholders: None of the above company benefits are definitively withheld from nominee shareholders, but you may need to make arrangements with the company secretary and/or your nominee account manager to confirm your entitlement. Check company terms.
- Shares required to be eligible for the benefit
- Company share price at 6 July 2009
- Cost in shares for benefit eligibility
- Total return (%) over five years. Based on investments (with dividends reinvested) from 30 June 2004 to 30 June 2009. Source: Hargreaves Landsdown/Lipper. NB: Past performance is no indication of future performance
- Formed June 2007
- Formed September 2007
It is important to check the terms and conditions of any shareholder benefit.
Some shares must be held for a set period before you become eligible and, in the case of Next, for instance, the perk itself only lasts for a limited period of time. Next shareholders with more than 500 shares (worth around £7,560) receive a single 25% discount voucher every year, which must be used within six months.
You may qualify for shareholder benefits by owning just one share, but the best benefits are often reserved for substantial investors.
For example, property developer Minoan Group offers shareholders discounts on its properties depending on the amount of shares you own and the length of time you’ve held them for.
Loss of shareholder benefits
It’s worth remembering that benefits can be withdrawn at any time, as Eurotunnel investors found to their annoyance.
When Eurotunnel launched in the 1990s, investors with shares worth more than £5,250 were entitled to unlimited trips on Eurotunnel’s car-carrying shuttle for just £1 per trip. However, when the company refinanced in April 2007, shareholders were offered just six single trips a year at a 30% discount.
After a shareholder revolt, investors were offered two alternatives – accept shares in the new company and lose the unlimited travel benefit, or keep the £1-a-trip perk and hold worthless shares in a dead company.
Other kinds of shareholder benefits
Instead of discounts or gifts, some companies offer alternative shareholder benefits.
Gas and electricity company National Grid, for example, offers shareholders a networking programme giving them a chance to question the agenda on issues such as social responsibility.
All shareholders are entitled to vote at the annual general meeting – which those with a real interest in the company may see as a perk of the best kind.