RESEARCH ARTICLES
OPEN LETTER To Members and Clerk of the Finance Committee
Thank you for helping to make the preliminary study of income trusts happen and allow for public participation. Canadians appreciate the process as some small way to rebuild trust in policy-makers in a situation where it has been terribly broken by tax and equity policy that defied past promises.
The placement firm, Patrick O’Callaghan and Associates and Korn/Ferry International has published a study that shows that income trust directors are receiving low pay that directors on traditional corporate boards. The study says that income trust directors earn an average of $34,823 a year compared with $54,662 at comparable corporations. That is 57% less for a trust director, despite the comparable role and responsibility when working for the trust and corporation.
Dow Jones reported that a survey of fund managers released by Merrill Lynch & Co. found that, “The proportion of fund managers wanting to see cash returned to shareholders reached a record high of 53% this month, up from 44% in December 2006.”
The Future for Investors was written by Jeremy Siegel who did a study of dividend-paying and other equities. He found that, adjusting for inflation and considering the period from 1871 through 2003, a full 97% of the total return to investors in U.S. stocks came from reinvesting dividends. Only 3 per cent resulted from capital gains.
QUOTE:
“People think that when they go into income trusts that they can’t lose anything—they can lose, very heavily...They should be much more educated and they should be asking questions.”
FROM: Tavia Grant and Roma Luciw
Report In Globe & Mail