PARIS — Renault’s board will meet on Thursday to decide on possibly dropping the dividend payment this year in light of the coronavirus crisis, three sources familiar with the situation have told Reuters.
A Renault spokesperson was not immediately available for comment.
While several automotive companies such as Michelin and Ford have already decided to reduce or suspend dividends on 2019 earnings in order to preserve cash, Renault so far has not said whether it will do the same. It had earlier proposed to pay a dividend of 1.10 euros ($1.20) per share.
Shareholders will vote on the issue at a delayed meeting that will probably take place in May or June.
The planned dividend had already been cut by two-thirds from the 3.55 euro per share payout on 2018 earnings, as Renault’s profitability had dropped in 2019, well before the coronavirus outbreak. Already shaken by charges against its former CEO Carlos Ghosn and forced to halt production in Europe and China because of the coronavirus, Renault has seen its share price fall by 56 percent since Jan. 1.
The French government is asking companies in which it is a shareholder to pay no dividend at all, especially if they are receiving state aid to get through the crisis, such as temporary unemployment.
Several board members who represent employees have already called on Renault, in which the French government holds a 15 percent stake, to scrap the dividend.
Workers at all Renault’s French factories are receiving unemployment benefits, which helps the company to keep them on the books. An additional 16,000 white-collar Renault workers in the Paris region are also using temporary unemployment for half of their working day.
Last week Renault and unions signed a “solidarity contract” to create a fund using donated paid time off to ensure workers receive 100 percent of their salaries during coronavirus shutdowns.
Renault, which is working on a restructuring plan that is likely to involve asset sales and exits from less-profitable markets, may also announce that its management may take a pay cut this year, one of the sources said, something other automakers including Daimler and Ford have already done.