Despite $58 Billion in Costs, Investors Still Lose $10 Billion: The Corporate Actions Paradox

Introduction: Paying More, Receiving Less

Every year, the global financial industry pours staggering sums into managing corporate actions — the routine yet complex processes that occur when companies issue dividends, rights, mergers, or other shareholder events.

In the U.S. alone, the DTCC and The Value Exchange estimate that corporate action processing costs $58 billion annually. That’s the price of ensuring accuracy, compliance, and operational control across issuers, custodians, data vendors, and investment managers.

Yet despite these enormous investments, the system still fails its ultimate purpose: maximizing investor value.

Scorpeo’s analysis reveals that investors lose an additional $10 billion every year through sub-optimal election decisions — or worse, through no decision at all — on voluntary corporate actions like scrip dividends and rights issues.

Billions in Cost, But Little in Return

The irony couldn’t be more striking.

For all the billions spent on systems, reconciliations, and manual interventions, investment teams still make sub-optimal elections over 50% of the time.

Corporate action processing has become a labyrinth. According to Citi’s 2025 Asset Servicing Report, each voluntary event now triggers over 110,000 firm interactions, costs $34 million to process, and still depends on manual data revalidation in 75% of cases.

Automation rates have fallen below 40%, even as costs rise by 10% year over year.

The industry’s attention — and budget — are being consumed by the mechanics of processing rather than the economics of outcome.

When Complexity Becomes Complacency

Voluntary events such as scrip dividends or rights issues require active decisions from asset managers. Yet most firms default to the “do nothing” approach. When no election is made, the default option — usually a cash payment — is automatically applied, often leaving investors worse off.

Scorpeo’s data shows that on scrip dividends alone, over $1 billion in value is missed annually, and across all voluntary corporate actions, that loss exceeds $10 billion.

The tragedy is not just inefficiency — it’s misplaced focus. The financial industry has built a multi-billion-dollar infrastructure to manage data, but not to optimize investor returns.

Conclusion: Time to Rebalance the Equation

The message is simple but urgent: Spending billions on operational accuracy means little if the end result is still lost value.

As Jonny Ruck, CEO of Scorpeo, observes:

“The industry is fighting hard to process corporate actions correctly — but not necessarily intelligently. We’re overpaying for precision and underinvesting in performance.”

Technology now exists to close that gap. The future lies not in more processing, but in smarter elections — automation that captures lost value, not just counts it.

Until that shift happens, the paradox will persist: an industry spending billions to lose billions.