Fewer Japan Firms Provide Shareholder Benefits

Tokyo, Nov. 26 (Jiji Press)--Japanese firms became slightly
reluctant to provide shareholder benefits such as gift certificates over the
past year, a recent survey showed.

The number of publicly traded companies that offer such shareholder
benefits fell 0.9 pct from a year before to 1,038 at the end of September,
the first decline since records began in 1993, Daiwa Investor Relations Co.
said.
Such firms made up 27.3 pct of the total, down 0.9 percentage
point, the unit of Daiwa Securities Group Inc. <8601> said.
Consumer lender Promise Co. <8574> and sushi store chain Kozosushi
So-Honbu Co. <9973> stopped offering shareholders gift certificates this
year.
Nissan Motor Co. <7201> and Yamaha Motor Co. <7272> scrapped
programs that give shareholders choices such as soccer tickets.
The moves reflect companies' efforts to rein in cash outflows as
they struggle with slumping earnings brought on by the economic slowdown.
Some companies saw their stock prices tumble after they announced
plans to forgo such benefits, indicating many individual investors are lured
by such programs.
Restaurant and bar operators are particularly vulnerable to such
market pressure as their shareholders attach importance to benefit programs
when they measure investment yields.
Steak restaurant operator Don Co. <8216> earlier this month saw its
shares post a limit loss one day after the company announced plans to stop
offering shareholders meal gift certificates.
A securities industry survey shows that 17 pct of shareholders cite
such benefit programs as a reason to buy shares.
The number of companies that offer such programs is unlikely to
increase because a growing number of firms are putting a priority on
dividend payments, an official at Daiwa Investor Relations said.