A distribution of company profits (distributable dividends) to equity holders (shareholders) either as a lump sum amount that would be added to, or at a rate exceeding that of, its normal dividend distributions. Dividends (often cash dividends– or dividends in a monetary form) are typically paid on a regular/ periodical basis — e.g., quarterly, semi-annually — but at times companies issue “unexpected” special dividends without any pre-set plans. Special dividends are distributed if a company has extraordinarily strong earnings/ profits.
Special dividends are non-recurring payouts, and are treated separately from regular dividends. Such payouts are associated with one-off events (an asset sale, a highly profitable deal, etc.) Special cash dividends may also be extended when a company has large cash balances.
These dividends are also called one-time dividends or extra dividends.
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