What Is the Dividend That Work Pays?

by Will Gish, studioD

The question of "which dividends work pays" depends upon the meaning of the phrase "pays dividends." This phrase caries a different meaning in financial parlance than it does as a common usage idiom. In financial terms, dividends constitute payments made by a company. In common usage, the phrase assumes a generic meaning applicable to myriad situations. In the context of both meanings, work may pay a number of types of dividends.


In financial terms, dividends constitute payments made to the owners of a company when that company posts profits at the end of a year or quarter. Dividends may assume various forms, including stock in other companies and property, though most often come in the form of cash payments. These payments equal a share of the profits distributed amongst the owners of the company. Because every stockholder of a company partially owns that company, stockholders receive dividends. In some instances, companies maintain preferred and common stockholders. In such instances, preferred stockholders receive dividends before common stockholders.

Employee-Owned Companies

Co-operative companies, also known as collectives, constitute business owned by the employees. If an employee-owned company issues stock, the employees of the company hold that stock. When an employee-owned company posts its annual profits, it pays dividends just like any other company might. Because the employees of the company own the company through their shares, the employees receive any dividends paid. Thus working for any employee-owned company literally pays dividends, and those dividends most commonly constitute cash payments made each year or quarter.

Benefits of Paying Employee Dividends

The National Center for Employee Ownership cites two primary benefits of paying dividends to employees. For any C Corporation, or a corporation taxed independently from its owners, dividends constitute a tax-deductible expenditure. What's more, paying employees dividends increases their sense of ownership of and thereby commitment to the company. Focusing the energy and attention of employees on the notion of collective ownership builds, according to the National Center for Employee Ownership, a sense of camaraderie and desire on the part of employees to ensure the perpetual success of the company. Employees may elect to use dividends as a means of paying back business loans, thus increasing the percentage of a company the employees own versus the percentage owned by a bank or financier.

"Paying Dividends"

The phrase "paying dividends" constitutes an English-language idiom. In common usage, "paying dividends" essentially refers to anything that provides a great benefit to an individual, group or society. For instance, if an individual undergoes a training program that leads to substantial promotions and pay raises in the workplace, that program pays dividends. Or, if a community invests a good deal of money and time in schools, and this investment improves the level of education and thereby per capita income in the area, the investment pays dividends. In this respect, any type of work that leads to great personal, professional, financial or any other type of gain pays dividends.

About the Author

Will Gish slipped into itinerancy and writing in 2005. His work can be found on various websites. He is the primary entertainment writer for "College Gentleman" magazine and contributes content to various other music and film websites. Gish has a Bachelor of Arts in art history from University of Massachusetts, Amherst.