Erie Indemnity Company’s board of directors has voted to increase quarterly dividend payments from $0.19 to $0.215 on each Class A share and from $28.50 to $32.25 on each Class B share. In separate actions, the board also reauthorized a stock repurchase program and set the management fee rate charged to the Erie Insurance Exchange for 2004.
“The dividend is payable January 20, 2004, to shareholders of record as of January 5, 2004, with a dividend ex-date of December 31, 2003,” said the announcement. It cited the Company’s continuing strong financial performance as supporting the 13.2 percent increase over the current dividend amount.
The board of also reauthorized a stock repurchase program effective immediately, under which the Company may repurchase up to $250 million of its outstanding Class A common stock through December 31, 2006. The purchases may be carried out “from time to time in the open market or by privately negotiated transactions, depending on prevailing market conditions and alternative uses of the Company’s capital,” said the bulletin.
The board voted to reduce for 2004 the management fee rate to 23.5 percent from the current 24 percent rate paid to Erie Indemnity Company by the Erie Insurance Exchange. “If the 23.5 percent rate had been in effect for the nine months ended September 30, 2003, the Company’s net income per share would have been reduced by $0.13 or 5.8 percent,” the announcement indicated. It noted that the board “has the authority to change the management fee rate at its discretion; however the maximum fee rate permissible by agreement is 25 percent. This action was taken after the board’s consideration and review of the relative financial position of the Erie Insurance Exchange and the Erie Indemnity Company.”
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