Helping public companies and their suppliers deliver better and more cost-effective programs since 1994


As we’ve noted in previous issues, your editors, and many of our savvier and busier friends, have been trying to clean up most of our smallish DRP and DSPP accounts. Why? Because of all the paperwork they generate - but also to be able to consolidate all our investments in a single place. And, quite aside from the fully consolidated ownership statements that all brokers have been offering, basically forever, and for free to customers like us, all of the bigger brokers offer totally free reinvestment of the dividends, upon request.

But we had three “nuisance accounts” that we can’t get rid of – and recently added a fourth – all of which arose when we transferred the full shares to our brokerage account, but where (a) the fractional shares cannot be transferred to the broker, due to a design flaw in the “DRS System” – and (b) where the transfer agent does not automatically liquidate the fractional share and send us a check to close the account completely, as some of the earlier and better written Plans wisely require the agent to do.

A few weeks ago, we got a quarterly statement for just such a “stranded” account…so we figured we’d try again to get it closed. We will be nice, and not I-D the company, or its transfer agent this time around, since, in our many earlier experiences, all the T-As we’ve contacted about this have been equally unhelpful… which really says to us, “It’s time for a fresh look – and for CHANGE here”… But here’s our story…unbelievably Kafkaesque as it may sound:

The statement we got, a “Summary of Account Holdings as of 16 September 2016” showed that we had just under a quarter of a share – 0.247984 shares to be exact – worth $7.78 - on which the dividend was a whopping $0.09.

And, oh joy! They reinvested the dividend…but not before deducting a fee of $0.08…so that one single penny was reinvested !!!…which brought the new balance to 0.248930.

Year-to-date, it showed at the bottom that the agent earned three full cents from me…

But likely, the agent earned about $6.00 or so from the issuer - for ‘account maintenance.’ Plus the issuer paid to print, enclose and mail three statements so far…plus another couple of bucks in postage, handling and stationery to send me the Annual Meeting materials…so let’s call it close to ten bucks per year, all in.

What kind of jackass deal is this, for an ‘investment’ worth less than eight bucks???

So we called the toll-free number, hoping against hope that maybe the agent could come up with a deal that made sense…to sell the fraction when other, bigger sales were being made - or maybe to bill the issuer for the seven bucks and change - plus maybe a little handling charge – as a way to call a halt to years and years of ten-buck-a-year expenditures they’d otherwise be on the hook to spend…

But NO…as the rep patiently but rather condescendingly explained, “The official Terms and Conditions of the Plan call for a fee of $15 to sell any shares – even fractional ones – and also for a brokerage fee of $0.15 per share.”

“So are you telling me that I would owe YOU seven or maybe eight dollars if you sell the shares for me” I asked… “And that you would keep my seven-plus bucks besides?”

But no, it sounded as if they would settle for the $7.76 or whatever the roughly one-quarter share was worth that day…and let it go at that…But why would WE agree to such a stupid deal?

“What if I call the IR officer at the firm, and ask if he or she might cut me a better, fairer-seeming deal?” I asked… “No again” said he. “The terms and conditions are ours, not the company’s”…So no dice there either…so far. (We DO think that a corporate IRO would be as outraged as we are by this, and would demand a fix…so T-As, please wake up here!)