Vector is majority owned by Entrust, a private trust, on behalf of 340,500 households and businesses in Auckland, Manukau, northern Papakura and eastern Franklin. The Entrust dividend is a direct result of its 75.1% shareholding in Vector.

Vector’s dividend is the same this year, but our dividend policy has changed, which has affected how the tax on the dividend is paid.

Vector used to pay most of the tax before it goes to shareholders, but this year the amount Vector pays is less - meaning Entrust pays more tax than it did last year.  It’s common practice for companies that pay dividends to make these sorts of changes. We have done this with the long-term interests of all our shareholders in mind.
 

Frequently Asked Questions

Why is my Entrust dividend less this year?

The dividend amount that Vector pays to shareholders hasn’t changed this year from last year.  Vector is paying 16.5 cents per share (for the full year), and last year we paid the same.

What has changed is the way that tax is paid – Vector used to pay most of the tax, but this year we changed our dividend policy, so the tax amount Vector pays is less and Entrust pays more than it did last year. This additional tax paid by Entrust has reduced the amount available to pay to Entrust beneficiaries, resulting in this year’s payment being lower than previous years.

There is also an increase in the number of beneficiaries receiving the payment, as Auckland continues to grow. This year there are 340,500 beneficiaries in the Entrust district, representing the largest number in the history of the dividend.

Why has Vector chosen this year to reduce the amount of tax it pays on dividends?

Vector’s board announced the change to the amount of tax it distributes with its dividends in February. For Vector, it’s a more efficient way to manage our tax obligations and is in the long-term interests of all our shareholders, including Entrust.

More broadly, Vector flagged in our annual meeting last year that we would review our overall dividend policy when we knew the outcome of the Commerce Commission’s regulatory reset. As above, we announced this change in February this year.
 

We understand that this year has been difficult for many people, and we are pleased that we are able to pay a dividend this year. Many other companies are not able to do this.

Vector made a profit – why couldn’t you put some of that into the dividend?

The dividend amount that Vector pays to shareholders hasn’t changed this year from last year.  Vector is paying 16.5 cents per share (for the full year), and last year we paid the same.

The change relates to how much of the tax Vector pays on the dividend before it goes to shareholders, such as Entrust. In order to manage our tax obligations efficiently, Vector has reduced the amount of tax it is paying on dividends. This is common practice for companies.

I expected the dividend to go up this year – with Covid-19 we’ve all been home using heaps more electricity.

Vector’s electricity volumes went down during lockdown because most businesses were shut or operating at reduced demand. In our annual results, Vector estimated that earnings were adversely impacted by $10 million due to COVID-19.