Introduction
Dividend reinvestment elections (DRIP) let you collect stakeholder preferences before creating a dividend event in Ledgy. For each eligible share class, stakeholders can choose whether they want to receive their dividend as cash or have it reinvested into new shares.
This article explains the end-to-end admin workflow, what stakeholders see in their dashboard, how Ledgy creates the resulting transactions, and how to handle leftover residual cash.
Who this is for: Account admins who manage dividend events for shareholders in Ledgy.
Before you start
This workflow applies to share-based dividend events. It is not the grant-based dividend equivalents workflow.
You configure elections per share class, and each selected share class must have a default payout method set.
Stakeholders only see elections for share classes where they currently hold shares and where elections have been enabled.
You can optionally notify stakeholders by email when elections open.
Residual cash from reinvestments is carried forward per stakeholder and share class. If you want to pay it out instead, that happens in a separate manual step later.
Important: If a stakeholder does not respond, Ledgy uses the default payout method for that share class when you create the dividend event.
Step 1: Configure election settings
Step 1: Open election settings
Go to Equity Events > Dividends and click Election settings.
Step 2: Enable stakeholder elections
Turn on Enable stakeholder election.
Optional: turn on Send an email notification if you want Ledgy to notify stakeholders when elections open.
Step 3: Add eligible share classes
Click Add a share class.
Select each share class you want to include in the election.
Choose the Default payout for each one: Cash or Reinvestment.
Select the 'Enable stakeholder election' toggle.
Step 4: Save
Save your changes. From this point on, stakeholders can submit a preference for the enabled share classes, and any stakeholder who does not reply will fall back to the default payout you selected.
You can always remove the Enable stakeholder election' toggle, this will remove the option for stakeholders to choose their reinvestment method. This will not delete previous elections which can be always visible on the election page from the admin side.
Step 2: Track responses and make overrides
The Election settings page also shows the current election status for each stakeholder and share class.
If nobody has replied yet, Ledgy shows No reply together with the default payout that will be used.
If a choice has been recorded, Ledgy shows the payout method, who recorded it, and when it was recorded.
Admins can edit one stakeholder's election, or edit a grouped stakeholder row, if they need to override a choice before the dividend event is created.
Step 3: What stakeholders see
Eligible stakeholders see the election in their stakeholder dashboard.
On the Holdings page, they see a banner that dividend reinvestment elections are open.
They open Election settings.
They choose Cash or Reinvestment for each eligible share class.
They can submit a first response or update their choice later while elections remain open.
If they do nothing, Ledgy uses the default payout method when you create the event.
Step 4: Create the dividend event
Go to Equity Events > Dividends and click Add dividend event.
Select the relevant share class and use Shares as the source.
In Payout type, choose Reinvestment election.
Fill in the event details, including the record date, payout per share, reinvestment price, share issuance date, and any tax settings you want to apply.
Note: If the selected share class does not have election settings configured yet, Ledgy prompts you to set them up first.
Step 5: Review the preview
After you create the event, Ledgy opens a preview that splits the results into two tabs:
Reinvestment: stakeholders whose dividend will be converted into newly issued shares.
Cash: stakeholders who will receive a cash payout.
Each tab shows its own transaction count so you can see how many draft transactions will be created in each bucket.
Before creating drafts, you can review and adjust the generated rows. Reinvestment items can also be bulk edited in the preview if you need to fine-tune prices or row-level values.
Any leftover cash that cannot be turned into whole shares stays attached to that stakeholder and share class as a residual.
Step 6: Create draft transactions and publish them
From the preview, click Create transactions.
Review the transaction date if prompted, then click Create drafts.
Ledgy creates:
Draft payout transactions for stakeholders who elected cash
Draft share issuance / increase transactions for stakeholders who elected reinvestment
Review the drafts in Ownership > Transactions and click Publish when you are ready to update the cap table.
Step 7: Handle residual payouts
Residual cash is not lost. Ledgy stores it per stakeholder and share class so it can be reused in the next dividend reinvestment event.
If you need to pay out those residuals instead, you can create draft payout transactions manually:
Go to Payroll > Residuals.
Review rows with Open status.
Select one or more rows and choose Payout.
Choose the transaction date and create the draft transactions.
Review and Publish the resulting payout drafts in Ownership > Transactions.
FAQs
What happens if a stakeholder does not respond?
What happens if a stakeholder does not respond?
Ledgy uses the default payout method configured for that share class.
Can stakeholders change their choice after submitting?
Can stakeholders change their choice after submitting?
Yes. While elections remain open, stakeholders can reopen their election settings and update their payout preference.
Can I turn elections off before creating the dividend event?
Can I turn elections off before creating the dividend event?
Yes. Turning elections off stops stakeholders from submitting new choices, but admins can still create the dividend event using the latest saved stakeholder replies and the configured defaults.
What transactions does Ledgy create?
What transactions does Ledgy create?
Cash elections become draft payout transactions. Reinvestment elections become draft share issuance / increase transactions.
What happens to leftover cash from reinvestment?
What happens to leftover cash from reinvestment?
Ledgy carries it forward as residual cash for that stakeholder and share class. You can either let it fund the next DRIP event or pay it out manually later from Payroll > Residuals.
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