Stockholders of large corporations often complain that managements know little about the owners' problems and concerns.
In response to such criticism, Washington Gas Light Co., one of this region's largest and oldest big businesses, asked an independent research firm last year to conduct a shareholder survey.
Results were published last week by the company, and the statistics provide an unusually complete profile of one company's owners. In addition, Washington Gas already is considering a change in policy to accommodate one proposal by many of the stockholders who responded.
The stockholders said that the Washington-based natural gas distribution firm should start absorbing the costs associated with reinvesting dividends in additional stock, a cost now borne by the stockholders. WGL is studying the feasibility of various changes in the dividend reinvestment plan, and "it is quite possible that the changes will include WGL's absorbing the administrative fees associated with the reinvestment of dividends," with a final decision expected by year's end, the company said.
According to the gas company's chairman, Paul Reichardt, the survey produced information that should enable management to plan effective programs to enhance current stockholders' investments and to attract other investors. "This is especially important in light of today's competitive environment in the investment area," he added.
Who is the typical Washington Gas inverstor? The survey provided these conclusions:
Most are individuals, rather than institutions, owning between 100 and 499 shares. Some 98 percent of WGL's 21,500 stockholders are individuals, and they control 82 percent of 4.4 million common shares outstanding.
Most owners hold WGL shares for a long time, with the average time being a decade.
Purchases of WGL stock were made primarily because of individual research and analysis, with stock brokers' recommendations being the second most important factor.
WGL shares are purchased mainly because of dividend income (the annual dividend yield is 9.9 percent, higher than all but five companies in the weekly Washington Business table of selected regional stocks).
The survey also showed that in 1978, household income of WGL investors was about $24,800, of which 17.5 percent came from stock dividends. The typical WGL investor owns shares of nine other companies, and the current market value of such holdings is $38,200.
As a Washington regional company, with business extending to Frederick County in Maryland, the Shenandoah Valley of Virginia and the gas drilling fields of West Virginia, 45 percent of WGL's individual stockholders live in Maryland (21 percent), Virginia (15 percent) or the District (9 percent).
The majority of stockholders surveyed (77 percent) said WGL should make known to the general public management's position on economic, political and regulatory issues.
In addition, the largest single category of complaints or comments focused on government regulation in the Washington region, particularly that of the D.C. Public Service Commission. "My research appears to indicate that WGL probably is not getting a fair shake as far as D.C. rates are concerned," said one of the respondents.
According to WGL, which is seeking an 18 percent or $17.4 million D.C. rate boost in a case filed last June with the city regulatory agency, stockholders have lost money from business in the District for three of the past six years.
Without a rate increase, the firm will earn a rate of return (profits related to total investments for serving city customers) of 2.6 percent this year, far below levels already permitted by the agency and the somewhat higher 10.5 percent return level WGL is seeking.