special dividend: meaning, definition, pronunciation and examples
C1/C2Formal, Financial/Corporate
Quick answer
What does “special dividend” mean?
A non-recurring distribution of a company's earnings or reserves to its shareholders, paid in addition to any regular dividend.
Audio
Pronunciation
Definition
Meaning and Definition
A non-recurring distribution of a company's earnings or reserves to its shareholders, paid in addition to any regular dividend.
A one-time payout by a corporation, often resulting from extraordinary profits, the sale of an asset, a legal settlement, or a strategic shift in capital structure (e.g., transitioning to a lower cash reserve policy). It signals strong financial health or a specific corporate event, unlike the recurring nature of regular dividends.
Dialectal Variation
British vs American Usage
Differences
No significant lexical differences. Spelling follows local conventions (e.g., 'specialise' vs. 'specialize' in other contexts, but the term itself is stable).
Connotations
Identical financial connotations in both markets.
Frequency
Equally common in UK and US financial journalism and corporate communications.
Grammar
How to Use “special dividend” in a Sentence
[Company] declared a special dividend of [amount].[Company] paid a special dividend to its shareholders.Shareholders approved the special dividend.Vocabulary
Collocations
Examples
Examples of “special dividend” in a Sentence
verb
British English
- The company is to special-dividend its surplus cash. (Very rare, non-standard)
American English
- The firm may special-dividend the proceeds. (Very rare, non-standard)
adjective
British English
- The special-dividend announcement boosted share prices. (Attributive use)
American English
- Investors awaited the special-dividend news. (Attributive use)
Usage
Meaning in Context
Business
Standard term in earnings reports, investor relations, and financial news. E.g., 'The board approved a special dividend following the successful divestiture.'
Academic
Used in finance, economics, and corporate governance literature analysing payout policies.
Everyday
Rare outside of personal investment discussions or financial news consumption.
Technical
Precise term in accounting (recording), securities regulation (declaration process), and corporate finance (impact on valuation).
Vocabulary
Synonyms of “special dividend”
Strong
Neutral
Weak
Vocabulary
Antonyms of “special dividend”
Watch out
Common Mistakes When Using “special dividend”
- Using it interchangeably with 'stock dividend' (payment in shares).
- Omitting 'special' and just saying 'dividend', which implies the regular payment.
- Treating it as an uncountable noun (e.g., 'pay special dividend' instead of 'pay a special dividend').
FAQ
Frequently Asked Questions
No. A regular dividend is part of a recurring payout policy (e.g., quarterly). A special dividend is a one-off, extra payment due to a specific corporate event or excess cash.
Typically yes, as it often signals strong liquidity or a profitable asset sale. However, it can also indicate a lack of profitable reinvestment opportunities, which some may view less positively.
In most jurisdictions (like the US and UK), it is generally taxed as ordinary dividend income in the year it is received, similar to regular dividends. Tax laws can vary, so professional advice is recommended.
Yes. Announcement often causes a short-term price increase due to the direct return of cash. On the ex-dividend date, the share price typically drops by approximately the amount of the dividend paid, all else being equal.
A non-recurring distribution of a company's earnings or reserves to its shareholders, paid in addition to any regular dividend.
Special dividend is usually formal, financial/corporate in register.
Special dividend: in British English it is pronounced /ˌspeʃ.əl ˈdɪv.ɪ.dend/, and in American English it is pronounced /ˌspeʃ.əl ˈdɪv.ə.dend/. Tap the audio buttons above to hear it.
Phrases
Idioms & Phrases
- “A windfall for shareholders (conceptually related)”
Learning
Memory Aids
Mnemonic
Imagine a SPECIAL occasion (like a company selling a big asset). For this SPECIAL event, they give out a SPECIAL extra gift to shareholders—the SPECIAL DIVIDEND.
Conceptual Metaphor
CORPORATE PROFITS ARE A PIE (Regular dividends are scheduled slices; a special dividend is an unexpected extra slice from a suddenly larger pie.)
Practice
Quiz
What is the primary characteristic of a 'special dividend'?