Masters in Business · Wednesday, August 26, 2026
David Bonson suggests that the commitment to paying and increasing dividends imposes a valuable discipline on management, acting as a safeguard against reckless mergers and acquisitions. He cites examples like Exxon and Chevron, which maintained dividends through crises, contrasting them with companies like Viacom that engaged in capital-destructive media deals.
“There is a sense in which A opportunity might get missed because the faithfulness to the dividend causes someone not to pursue a risk that might have ended up paying out.”
“What I would suggest is that's a risk worth taking for most investors, not those with a highly speculative or high risk, high beta, high octane part of their portfolio.”
“They didn't cut the dividend during COVID, for God's sake, when oil was negative. They didn't cut the dividend during Valdez, during the financial crisis.”