Vodafone’s decision to cut its dividend has focused attention once more on other listed companies that might be forced to follow suit. This, though, is harder than it looks. Companies can find myriad ways to stave off the evil, humiliating hour when they have to put the divi, or at least part of it, to the sword.
Chief executives, after they’ve been in the saddle for a couple of years, will do almost anything rather than make a symbolic cut, which is usually accompanied by their sacking. And there are plenty of ways to sustain a dividend, not least by going to the bank for cash.
New chief executives, on the other hand — such as Nick Read at Vodafone — have no such qualms.