At its regular meeting held Dec. 6, 2016, the Board of Directors of Erie Indemnity Company (NASDAQ: ERIE) set the management fee rate charged to Erie Insurance Exchange, approved an increase in shareholder dividends and declared the quarterly dividend.
The Board agreed to maintain the current management fee rate paid to Erie Indemnity Company by Erie Insurance Exchange at 25 percent, effective Jan. 1, 2017. The management fee rate was 25 percent for the period Jan. 1 through Dec. 31, 2016. The Board has the authority under the agreement with the subscribers (policyholders) at Erie Insurance Exchange to set the management fee rate at its discretion; however, the maximum fee rate permissible by the agreement is 25 percent. This action was taken based on the Board's consideration and review of the relative financial positions of Erie Insurance Exchange and Erie Indemnity Company.
The Board also agreed to increase the regular quarterly cash dividend from $0.73 to $0.7825 on each Class A share and from $109.50 to $117.375 on each Class B share. This represents a 7.2 percent increase in the payout per share over the current dividend rate. The next quarterly dividend is payable Jan. 20, 2017, to shareholders of record as of Jan. 5, 2017, with a dividend ex-date of Jan. 3, 2017. Erie Indemnity Company has paid regular shareholder dividends since 1933.