January 18, 2021

Striking a Balance

If you’ve ever worked with a budget, you know that covering all your bases requires careful choices. Should you pay off your house, or would it be better to put that money into your retirement account?

MaxYield Cooperative’s board of directors faces similar challenges with equity management.
“It’s a balancing act,” said Howard Haas, board chairman. “We want to get more current on deferred equity, but we also have to make sure we’re adequately capitalized to meet clients’ needs today.”

The MaxYield board is committed to a balanced approach of:
1. Investing in capital equipment upgrades
2. Retiring term debt on schedule
3. Retiring some allocated equity each year

“Equity management is an annual decision, and it’s driven by your cooperative’s financial performance,” said Keith Heim, MaxYield’s CEO.

In the past seven years, MaxYield has paid $10.57 million through a combination of cash patronage on the current year’s earnings and retirement of previously issued stock. In the past five years, MaxYield has also distributed more than $8.1 million in tax deductions through the Domestic Production Activities Deduction. Equity Holders can claim these deductions on their tax forms.

MaxYield’s recent discounted equity option is another option that benefits members and gives them more choices. “The discounted equity program is another solid step for strengthening our approach of equity management to benefit our clients, both now and in the future,”
Heim said.

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