A Bold (or Risky) Response to Roiling Markets

It did indeed seem as if April was the cruelest month. Battered by tariff announcements, the stock market went on its wildest ride since the COVID-19 pandemic. At the same time, predictions of lower corporate profits and a tough economy got louder.

But none of that stopped some 60 individual firms from going big—some of them announcing increases to their stock dividends, others their new share-repurchase plans. Experts say these decisions to increase financial payouts can be seen as an aggressive move to try to attract and retain investors who might otherwise be deterred by plunging or highly volatile share prices. “It can be good for attracting shorter-term, higher-volatility investors,” says Jeff Constable, leader of Korn Ferry’s Financial Officers practice in North America.

The moves sharply contrast with those of many other companies that—citing economic and global-trade uncertainty—have withdrawn financial guidance and limited share-buyback programs. Still, dabbling with dividends at any time of year can be a risky step, considering that the S&P 500 spent more than $629 billion on them in 2024, up 6% from the year before. One dividend increase can lead investors to expect that others will follow as a matter of routine. In fact, these same companies may later need to cut the dividends, which will have the effect of pushing away the investors they’re courting. “Dividend increases are not something that you can sustain quarter after quarter without figuring out how to pay for them,” says Peter McDermott, head of Korn Ferry’s Corporate Affairs practice in North America.

Without a doubt, plunging stock prices right after the tariff announcement drew immediate concern from investor-relations executives, CFOs, and board directors. In general, dividend increases have slowed. In the first three months of 2025, in fact, they were 14% less than the same period in 2024.

Analysts at S&P Dow Jones Indices, which monitors stock trends, said the current economic environment likely limited dividend growth. They said further that uncertainty over global government policy, employment, and inflation may keep companies from making big financial commitments, whether geared toward growth (such as expanding factories) or paying shareholders (such as a dividend increase).

For his part, Chad Astmann, co-head of Korn Ferry’s Global Investment Management practice, says this is a tricky moment for firms weighing dividend decisions. “The uncertainty around tariffs and interest rates alone should give CFOs pause,” he says. Meanwhile, regardless of broader market movements, McDermott advises executives to be in constant contact with Wall Street analysts and investors, to explain how their company intends to navigate the current environment—whatever that environment may be.

Learn more about Korn Ferry’s Financial Services capabilities.

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