Disney Has Reasons for Annual Dividend

Here’s a little background, which I got from shareholder services at Disney around 1992, regarding Don Delone’s letter [“Disney’s ‘Creative Management,’ ” Letters, Oct. 11] on Disney’s new annual dividend.

1. Many of Disney’s shareholders had just one or two shares, gifts from family when they were children, for sentimental reasons. Donald and Mickey even appear on the certificates.

2. Two shares when Eisner took over would now be 96 shares, allowing for 4:1, 4:1 and 3:1 stock splits, the most recent just this year.

3. Disney only pays about a 0.6% dividend, though it may be higher at the moment due to a 40% drop in the price of the stock since August.

4. Disney claims the cost of preparing and mailing a dividend check and enclosures is more than the amount of many of the checks. This is true in many cases. My last dividend check in 1996 was 88 cents quarterly dividend for eight shares (24 shares if I still owned them).

5. In 1996 Disney called back its stock from shareholders of less than 100 shares. The reason given was the expense of maintaining the two- and eight- and 32-share accounts. I am, therefore, no longer a Disney shareholder.

6. Hopefully, Disney will pay out the new annual dividend at the beginning of the year, not the end. Maybe they’ll even raise the dividend from 0.6% to a more common industry figure like 2%.

RICK ROFMAN

Van Nuys