The World of Shareholder Perks and Benefits
Some Corporations Reward Their Owners With Unique Perks and Benefits
Shareholder perks are one of those things that come and go in cycles. When I first wrote this piece on April 16th, 2001, I highlighted seven corporations that offered their shareholders perks, freebies, goodies, discounts, and a whole slew of special treatment. To qualify for these perks, an investor usually had to have at least one share of stock in certificate form, registered in their own name rather than held in a brokerage account.
I explained that, although shareholder perks should never be the primary motivation for investing in a company, they could sweeten the deal.
The Original Shareholder Perks I Discussed
Before I get to the new list of companies offering shareholder perks, it's interesting to see how things have changed in the past decade and a half. The original list of seven corporations I included were:
One of the world's premier beverage companies, Anheuser-Busch owned a chain of theme parks under the Busch Gardens and Sea World names. Shareholders were given a 15% discount on the price of admission as well as a grab bag full of various "goodies". The company has since merged with InBev and sold its theme park division to The Blackstone Group, thus ending this particular shareholder perk. As I write this update on May 28th, 2016, Anheuser-Busch InBev has received the European Union's blessing in its proposed merger with SABMiller, to combine the world's largest two brewing companies into one.
- Berkshire Hathaway
The investment vehicle of billionaire Warren Buffett, offers some of the best shareholder perks in the business world. Investors are treated to discounts at GEICO Insurance, as well as large price reductions during the weekend of the shareholder meeting on merchandise from Borsheim's Jewelry and Fine Gifts and Nebraska Furniture Mart. Back in those days, the cheapest way to become an owner of Berkshire Hathaway to take advantage of this perk was to buy the Class B stock, which was around $2,140 per share. However, when the holding company merged with one of the world's largest railroads, Burlington Northern Santa Fe, its board of directors split the dual-class B shares on a 50-to-1 basis (to learn more about this topic, read What Is a Stock Split?). Had that split never occurred, today's stock price of $143.35 per Class B share would have been $7,167.50, putting it out of reach for some smaller investors. Thankfully, that's not the case and Berkshire Hathaway not only still offers these discounts, but has expanded them, as well. You can get everything from recreational vehicles and pre-constructed homes to running shoes cowboy boots at fantastic prices with your shareholder credentials.
- McDonald's Corporation
The world's largest fast food chain, McDonald's rewarded its owners with a gift certificate each year, usually for free fries or, I believe, a Big Mac. This shareholder perk has never really been formally announced and, when it is given, usually comes tucked in with the the annual report if you hold your shares directly.
For years, Newell-Rubbermaid gave investors free passes to shop at the employee-only store, which not only offered huge discounts on its legendary merchandise but had certain products that weren't sold to the general public. With Newell-Rubbermaid merging with Jarden in a $15 billion deal that closed in April 2016 (barely a month before this update), there's no word, yet, on whether this shareholder perk will survive. Investors might have reason to be optimistic as the new company is called Newell brands and the old Newell-Rubbermaid stockholders own 55% of the equity.
Owners of Starbucks have long enjoyed a shareholder perk that will literally perk them up - free coffee. Tucked in with their annual report, investors often find a gift certificate for a free beverage at any Starbucks location.
- The Walt Disney Company
Back in 2001, the shareholder perk for Disney's stockholders was the ability to pay $39 for enrollment in the Magic Kingdom Club, a 20% discount to non-shareholders. Members received deep discounts ranging from 10% to 30% at all Disney resorts, stores, theme parks, attractions, and events. In recent years, Disney stopped giving discounts to shareholders with only certain shareholders who already had membership grandfathered into the plan. Honestly, I think it's a shame. At the very least, they could offer something like a free lunch at Club 33 once a year for shareholders with at least 1,000 or 10,000 shares.
- William Wrigley Corporation
One of the greatest investments of all time, William Wrigley, the world's largest bubble gum manufacturer and the powerhouse behind things like Juicy Fruit, Big Red, and Wrigley's, was taken private after the billionaire Mars family bought them to add to their M&M empire. Prior to this, Wrigley had one of my favorite shareholder perks. It would send investors twenty packs of free gum every year at Christmas as a "thank you" for investing their money.
The State of Shareholder Perks for Today's Investor
Now, here we are more than fifteen years later and the world is a very different place. Even though paper stock certificates have been pushed to extinction and replaced by the Direct Registration System or other ways to buy stock without a broker such as direct stock purchase plans and dividend reinvestment plans, companies have slowly dropped them.
Not just in the United States, either. In Japan, Nissan Shatai announced on December 17th, 2015, that it was ending its shareholder benefit program. I find this loss of shareholder perks to be terribly disappointing. As hyperactive trading continues to take hold and long-term investors forgotten - even though it is the long-term investors who end up amassing the biggest fortunes - a certain culture of fostering and rewarding business-like ownership has been lost to some degree. Perhaps it will return in the future. I certainly hope it does.
There are still a handful of places that offer shareholder perks and that weren't on my original list. These include:
- Carnival Cruise Lines
Carnival Corporation openly celebrates its shareholder perks, announcing them with fanfare on their website. Shareholders sailing 6 days or fewer get a free credit of $50 per stateroom, shareholders sailing 7 to 13 days receive a free credit of $100 per stateroom, and shareholders sailing 14 days or longer receive a shareholder credit of $250 per stateroom.
- Churchill Downs
If you own 100 shares of the stock as of December 31st of the previous year, you can participate in something the firm calls its Shareholder Pass Program. For this shareholder perk, the company will send two free passes per household. According to the company's investor relations department, "The passes allow free general admission at all our racing and off-track betting facilities. They are valid for an unlimited number of visits during the year as well as general admission for the Kentucky Oaks and the Kentucky Derby at Churchill Downs. The passes, however, are NOT VALID for the Breeders' Cup World Championships when they are held at CDI venues or any other special event conducted at a CDI racetrack."
- Ford Motor Company
Owners of 100 shares of Ford common stock, who have held their position for at least six months, can enroll in the X-Pricing program, which allows them to pay 4% above employee pricing. Depending upon the model you select, this can save you thousands upon thousands of dollars on your next car, truck, or SUV.
- Intercontinental Hotels Group (IHG)
Through a "dedicated, controlled access website", registered shareholders of IHG can book hotel stays for discounted prices (subject to availability). IHG owns brands like Holiday Inn, Holiday Inn Express, Candlewood Suites, Intercontinental Hotels & Resorts, Hotel Indigo, and Staybridge Suites.
- International Business Machines
IBM allows stockholders to receive a special code, giving them access to the employee-only store, complete with significant discounts on computer hardware.
- Lindt & Sprüngli AG
For years now, shareholders with voting rights receive a large gift box of assorted Lindt & Sprüngli chocolates. The gift boxes are given to the entitled shareholders who attend the company's annual general meeting in Switzerland, as well as those who do not attend but, instead, vote by proxy before the deadline. The company does not ship the gift boxes outside of Switzerland, so if you're an international voting-shareholder, you'll need to arrange an agreement with a friend or business that can accept the gift box on your behalf and ship it back to you through alternative means. That, or, you can take a trip to Switzerland and visit the factory on the shores of the picturesque Lake Zurich.
In a personal post about portfolio weightings, I discussed the appeal of a business like Kimberly-Clark. According to one source I found, Michael McDonald at MSN Money, owners of the common stock who hold it outright have the chance to pay $24.49 for a box that includes many of the firm's products, and which also comes with coupons, putting the total value at $45.00 per box.
- Royal Caribbean Cruises
As with Carnival Cruise Lines, Royal Caribbean Cruises lists its shareholder perks - or as it calls them, its shareholder benefits - right on the front page of its corporate investor relations site. It awards a $50 onboard credit per stateroom for shareholders sailing for 5 nights or less, $100 for shareholders sailing 6 to 9 nights, $200 for shareholders sailing 10 to 13 nights, and $250 for shareholders sailing 14 or more nights.
Sometimes, a bit of research will uncover shareholder perks you didn't know existed. If you're in Switzerland and own 75 shares of Weisse Arena AG, you can get a 10% reduction for yourself and your family on all company lift tickets and rentals.
One of my favorite shareholder perks comes from Japan due to how it is structured, rewarding owners based on their total ownership stake. Japan Airlines will allow investors who own 100 or more shares of its common stock to save 50% on regular one-way airfare for any domestic flight right. The number of coupons you receive increases as your share count rises. For example, if you own 900 shares, you get five coupons, so you could take advantage of this five times. For 1,100 to 99,999 shares, you get 5 coupons plus 1 coupon per 500 shares over 1,000 shares. For 100,000 shares or above, you get 203 coupons plus 1 coupon per every 1,000 shares above 100,000 shares.
But, wait! It gets better. To reward long-term owners, shareholders who have been on record for seven consecutive dates are given extra rewards. Those with between 300 and 999 shares receive an extra discount coupon for every seven consecutive record dates they've invested. Those with 1,000 to 9,999 shares receive two additional discount coupons for the same. Those with 10,000 shares or more receive three additional coupons for the same.
There can even be shareholder perks hidden within the fine print, encouraging direct ownership. I know of one fund that gifts almost $205 in free shares to long-term investors for every $10,000 they hold at least 12 months. Sometimes you'll run into something like a master limited partnership that allows monthly investors who buy equity through regular paycheck withdrawals to get a 15% discount from the market price everyone else pays. Usually, these are not touted from the rooftops as they are meant to appeal to those in the know; insiders and their family members. If you stumble upon one for a business you wanted to own, anyway, it can sweeten the pot.