Dividend Clawback
An arrangement under which those financing a project agree to contribute, as equity, any prior dividends received from the project to cover any cash shortages.
Investopedia Commentary
When there is no cash shortfall, those investors who provided funding are able to keep their dividends. A dividend clawback arrangement provides incentive for a project to remain on budget so that investors do not have to return dividends received prior to a cost overrun.
Related Links
How and Why Do Companies Pay Dividends?
The Importance of Dividends
How Dividends Work For Investors
The Perks Of Dividend Reinvestment Plans
See also: Declaration Date, Dividend, Dividend Yield, Double Taxing, Project Finance
Also spelled: claw