In 1912, the Japanese government sent 3,020 cherry blossom trees to President Taft as a gift. During President Obama’s administration, Prime Minister Shinzo Abe gifted him sterling silver cocktail forks. Then for President Trump, a three thousand dollar golf club. Gift giving is a cornerstone of Japanese culture and has been for hundreds of years. There are distinct types of gifts, foreign and domestic (omiyage and meibutsu), Summer and Winter (ochugen and oseibo), and proper gift giving etiquette is considered essential to navigate society.

In 2001 a Japanese food company, Kagome, watched their shareholder base shift from institutional to retail. Their plan to adapt was simple: every individual shareholder who holds more than 100 Kagome shares was eligible to receive a quarterly gift valued at ¥2,000, or just under $20. These gifts helped the company build a stronger relationship with its retail investors and may have contributed to its ability to better weather the Great Recession of ‘08. The Japanese market has proved that some shareholders are much more likely to hold stocks if there’s an immediate benefit to them doing so, even in economic downturns.

Kagome was not the first company to offer perks to shareholders. Stock perks are common in Japan, with over 70% of listed retail companies offering them. Companies that offer perks consistently outperform companies that don’t. The relationship is symbiotic, as it is beneficial to both IROs and retail investors. IROs are able to gather data on and engage with a meaningful segment of their shareholder base driving longer term shareholding behavior. Retail shareholders get customized rewards from companies they already love over and above the capital benefits of share ownership as well as a more direct channel of communication with the corporation. It’s a win-win!

So why has this practice never become commonplace in the West? The answer is simple. Never before has there been a concerted effort by industry veterans to import it. Well, at least not until now. Stockperks was created to open a dialogue between companies and retail shareholders, benefiting everyone involved. It’s a tried and true method, and there’s an elegance in its simplicity: Got stock? Get perks!

Hope you enjoyed reading the latest blog from Young Money, our resident Gen Z expert. Any stocks mentioned in this blog post are not an endorsement or recommendation to purchase shares.