UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number
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811-21633
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Cohen & Steers Dividend Majors Fund, Inc.
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(Exact name of registrant as specified in charter)
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280 Park Avenue, New York, NY
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10017
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(Address of principal executive offices)
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(Zip code)
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Adam M. Derechin
Cohen & Steers Capital Management, Inc.
280 Park Avenue
New York, New York 10017
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(Name and address of agent for service)
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Registrants telephone number, including area code:
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(212) 832-3232
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Date of fiscal year end:
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December 31
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Date of reporting period:
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December 31, 2011
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|
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Item 1. Reports to Stockholders.
COHEN & STEERS DIVIDEND MAJORS FUND, INC.
To Our Shareholders:
We would like to share with you our report for the year ended December 31, 2011. The net asset value (NAV) at that date was $13.69 per common share. The Fund's common stock is traded on the New York Stock Exchange (NYSE) and its share price can differ from its NAV; at year end, the Fund's closing price on the NYSE was $12.09
The total returns, including income, for the Fund and its comparative benchmarks were:
|
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Six Months
Ended
December 31, 2011
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Year
Ended
December 31, 2011
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Cohen & Steers Dividend Majors Fund at
Market Value
a
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10.46
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%
|
|
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0.17
|
%
|
|
Cohen & Steers Dividend Majors Fund at NAV
a
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|
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2.36
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%
|
|
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5.75
|
%
|
|
S&P 500 Index
b
|
|
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3.69
|
%
|
|
|
2.11
|
%
|
|
Blended benchmark50% S&P 500 Index/
50% FTSE NAREIT Equity REIT Index
b
|
|
|
2.63
|
%
|
|
|
5.27
|
%
|
|
The performance data quoted represent past performance. Past performance is no guarantee of future results. The investment return and the principal value of an investment will fluctuate and shares, if sold, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Current total returns of the Fund can be obtained by visiting our Web site at cohenandsteers.com.
The Fund implements fair value pricing when the daily change in a specific U.S. market index exceeds a predetermined percentage. Fair value pricing adjusts the valuation of certain non-U.S. holdings to account for such index change following the close of foreign markets. This standard practice has been adopted by a majority of the fund industry. In the event fair value pricing is implemented on the first and/or last day of a performance measurement period, the Fund's return may diverge from the relative performance of its benchmark index, which does not use fair value pricing. An investor cannot invest directly in an index.
The Fund makes regular quarterly distributions at a level rate (the "Policy"). Distributions paid by the Fund are subject to recharacterization for tax purposes and are taxable up to the amount of the Fund's investment company taxable income and net realized gains. As a result of the Policy, the Fund may pay distributions in excess of the Fund's investment company taxable income and realized gains. This excess would be a "return of capital" distributed from the Fund's assets. Distributions of capital decrease the Fund's total assets and, therefore, could have the effect of increasing the Fund's expense ratio. In addition, in order to make these distributions, the Fund may have to sell portfolio securities at a less than opportune time.
a
As a closed-end investment company, the price of the Fund's NYSE-traded shares will be set by market forces and at times may deviate from the NAV per share of the Fund.
b
The S&P 500 Index is an unmanaged index of common stocks that is frequently used as a general measure of stock market performance. The FTSE NAREIT Equity REIT Index is an unmanaged, market-capitalization-weighted index of all publicly traded REITs that invest predominantly in the equity ownership of real estate. The index is designed to reflect the performance of all publicly traded equity REITs as a whole.
1
COHEN & STEERS DIVIDEND MAJORS FUND, INC.
Investment Review
U.S. equities faced particularly harsh headwinds in 2011, but most managed to deliver positive total returns for the year. The rally that began in 2009 ended during the second quarter with the aftermath of the Fukushima nuclear disaster, Arab Spring uprisings, weak U.S. economic data and persistent European sovereign debt concerns. Despite good first- and second-quarter earnings (but subdued guidance), volatility spiked in August in response to the European Union's inability to reach a solution to its debt crisis, the first-ever U.S. credit rating downgrade, weakening global economic data and slowing growth in China.
Investors had to wait until October for a rally, when progress in Europe restored confidence and low prices made stocks attractive. Concerns about Europe resurfaced in November, and were subsequently allayed by improvements in the U.S. economy and central banks' actions to support Europe's banks.
Defensive sectors beat cyclicals
Investors moved in and out of defensive stocks through the year, but on balance favored them over more economically sensitive cyclicals. Utilities were the strongest performers (+20.0% as measured by the S&P 500 Index), valued for their stable cash flows and relatively high yields in the low-interest rate environment. Health care (+12.7%) and consumer staples companies (+14.0%) were also in favor. Health care companies had declined in 2010 due to concerns about the Affordable Health Care Act, but rebounded in 2011 as investors sought safer havens to weather volatility. Consumer staples names were perceived as relatively defensive.
Trade-related sectors struggled
The slowdown in China and emerging markets added to worries about Europe, and trade-related sectors lagged. In particular, the materials (9.8%) and industrials (0.6%) sectors cooled when China's housing bubble burst. News of reduced U.S. Department of Defense spending also hurt some industrials companies.
Within the energy group (+4.7%), volatile oil prices and instability in the Middle East benefited diversified companies with refining and chemical operations over those engaged only in exploration and oil and gas production. Information technology companies (+2.4%) reported weak PC sales, but found some relief in the growth of mobile devices and smart phones. Telecommunications companies (+5.6%) rallied in part because of their stable yields.
Financial institutions (+4.6%) have had a difficult few years, and 2011 was no exception. Despite improved credit metrics, loan and revenue growth remained elusive. As the European debt crisis deepened, questions about banks' exposure to undercapitalized European banks punished their stock prices further. REITs, which outperformed the broader markets, are included in the sector, and pulled the group into positive territory in the blended index.
2
COHEN & STEERS DIVIDEND MAJORS FUND, INC.
Fourth-quarter returns boosted REITs
REITs were subject to the same macroeconomic pressures as the broader markets, but performed substantially better. The self storage sector (with a total return of +35.2%
c
) benefited from accelerating cash flow growth driven by improving fundamentals; it also took market share from smaller private operators. Apartment owners (+15.1%) were aided by improving employment trends among younger people, who have an above-average propensity to rent.
Simon Property Group, which owns high-quality malls and outlet centers in desirable locations, drove the gain in regional malls (+22.0%). The performance of shopping center REITs (0.7%) reflected their vulnerability to limited job and wage growth. The office sector (0.8%) saw declines in companies focused on suburban properties, where demand has been lackluster. Companies with office properties concentrated on the east and west coasts performed better. Industrial property companies (5.2%) were brought low by ProLogis, which is 80% of the sector and has a large presence in Europe, where economic growth stagnated.
Fund performance
The Fund had a positive total return for the period based on NAV and outperformed the S&P 500 Index. Our allocation to REITs was a major factor. The Fund also outperformed its blended benchmark due in part to our stock selection in the industrials, IT and consumer discretionary groups. Within IT, our allocation to Visa was a standout; the U.S. Federal Reserve Board capped interchange fees at a higher rate than expected, which means the banks are less likely to seek significant compensatory reductions in network fees. Our position in Simon Property Group was also favorable, as were our allocations to Ross Stores and McDonald's, which benefited from cost-conscious consumers.
Stock selection within the energy, utilities and financial services groups and our underweight in consumer staples companies had negative impacts on relative performance. Our holdings in Corning and Oracle detracted as well. Corning, which makes LCD screens for TVs and personal computers, slumped on the outlook for slower consumption of these items. Oracle plunged when its second fiscal quarter results failed to meet expectations. The news was taken as evidence that companies are spending less on software, and dragged on the sector.
The Fund's options strategy made a meaningfully positive contribution to performance in 2011, benefiting from our tactical selection of option strike prices and active rolling of option positions. In the first two months, a strong market uptrend on relatively lower volatility and option premiums led to early losses in the strategy. From March to July, the strategy benefitted from a range-bound market. From August through the end of the year, while the markets were generally choppy, the options strategy provided positive performance driven in part by higher overall market volatility and option premiums.
Investment Outlook
We continue to believe that the crisis in Europe is far from over; that the improving U.S. economic data, while encouraging, signal something short of a vigorous recovery; and consequently, that the first half of 2012 remains highly uncertain.
c
Property sector returns are in U.S. dollars as measured by the FTSE NAREIT Equity REIT Index.
3
COHEN & STEERS DIVIDEND MAJORS FUND, INC.
For these reasons, we expect (1) more intervention by politicians and central bankers, (2) continued historically low interest rates in the United States, (3) modestly positive U.S. economic data (with GDP growth in the 12% range and rising employment), (4) high but slowing growth in China and emerging markets, (5) short-term measures to address Europe's long-term debt crisis, (6) slightly softer revenue and earnings growth guidance by some large-cap multinational companies and (7) a relatively firm U.S. dollar compared with most developed market currencies.
REIT fundamentals are tied to the economy
An improving economy should support continued gradual improvement in real estate fundamentals, given low new supply in most sectors, and we target markets with above-average employment and income trends. In an election year that will likely present both opportunities and risks, we will monitor how the results might affect employment in the financial and health care industries.
We like high-quality retail owners that are in a position to thrive despite competition from e-commerce or the potential loss of major tenants. We also favor urban office owners that we believe should benefit from the growth of the technology, media and life science industries in San Francisco, Boston and New York, for instance; but remain underweight suburban offices, secondary retail and health care properties.
2012 presents opportunities and uncertainty in equal measure
In this fluid environment, U.S. equities appear modestly priced by historical standards, cash flows and dividends are rising and high volatility is likely to provide near-term buying opportunities. It appears that the first half of the year will be marked by early optimism, which will likely fade as data softens from the fourth-quarter's brisk pace. We believe volatility could be extreme as most asset classes and markets face increasing pressure in a world desperately seeking attractive risk-adjusted returns. Our early view is that 2012 will end with markets gaining modestly.
4
COHEN & STEERS DIVIDEND MAJORS FUND, INC.
Sincerely,
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|
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MARTIN COHEN
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ROBERT H. STEERS
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Co-chairman
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Co-chairman
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JOSEPH M. HARVEY
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RICHARD E. HELM
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Portfolio Manager
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Portfolio Manager
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JON CHEIGH
Portfolio Manager
The views and opinions in the preceding commentary are subject to change. There is no guarantee that any market forecast set forth in the commentary will be realized. This material represents an assessment of the market environment at a specific point in time, should not be relied upon as investment advice and is not intended to predict or depict performance of any investment.
Visit Cohen & Steers online at cohenandsteers.com
For more information about any of our funds, visit cohenandsteers.com, where you will find daily net asset values, fund fact sheets and portfolio highlights. You can also access newsletters, education tools and market updates covering the global real estate, listed infrastructure, utilities, large cap value and preferred securities sectors.
In addition, our Web site contains comprehensive information about our firm, including our most recent press releases, profiles of our senior investment professionals and an overview of our investment approach.
5
COHEN & STEERS DIVIDEND MAJORS FUND, INC.
December 31, 2011
Top Ten Holdings
(Unaudited)
Security
|
|
Value
|
|
% of
Net
Assets
|
|
Simon Property Group
|
|
$
|
11,110,889
|
|
|
|
6.4
|
%
|
|
Equity Residential
|
|
|
5,188,076
|
|
|
|
3.0
|
|
|
Boston Properties
|
|
|
4,940,160
|
|
|
|
2.9
|
|
|
HCP
|
|
|
4,675,914
|
|
|
|
2.7
|
|
|
ProLogis
|
|
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3,464,794
|
|
|
|
2.0
|
|
|
Chevron Corp.
|
|
|
2,851,520
|
|
|
|
1.7
|
|
|
Exxon Mobil Corp.
|
|
|
2,678,416
|
|
|
|
1.6
|
|
|
Senior Housing Properties Trust
|
|
|
2,641,188
|
|
|
|
1.5
|
|
|
Apple
|
|
|
2,632,500
|
|
|
|
1.5
|
|
|
AvalonBay Communities
|
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2,625,060
|
|
|
|
1.5
|
|
|
Sector Breakdown
(Based on Net Assets)
(Unaudited)
6
COHEN & STEERS DIVIDEND MAJORS FUND, INC.
SCHEDULE OF INVESTMENTS
December 31, 2011
|
|
|
|
Number
of Shares
|
|
Value
|
|
COMMON STOCK
|
|
99.4%
|
|
|
|
|
|
|
|
|
|
CONSUMERCYCLICAL
|
|
6.2%
|
|
|
|
|
|
|
|
|
|
APPAREL
|
|
0.3%
|
|
|
|
|
|
|
|
|
|
NIKE
|
|
|
|
|
5,500
|
|
|
$
|
530,035
|
|
|
AUTO PARTS EQUIPMENT
|
|
0.6%
|
|
|
|
|
|
|
|
|
|
Johnson Controls
|
|
|
|
|
32,900
|
|
|
|
1,028,454
|
|
|
LEISURE TIME
|
|
0.2%
|
|
|
|
|
|
|
|
|
|
Carnival Corp.
|
|
|
|
|
11,500
|
|
|
|
375,360
|
|
|
MEDIA
|
|
1.5%
|
|
|
|
|
|
|
|
|
|
The Walt Disney Co.
a
|
|
|
|
|
49,200
|
|
|
|
1,845,000
|
|
|
Time Warner Cable
|
|
|
|
|
12,100
|
|
|
|
769,197
|
|
|
|
|
|
|
|
|
|
2,614,197
|
|
|
RESTAURANT
|
|
1.9%
|
|
|
|
|
|
|
|
|
|
McDonald's Corp.
a
|
|
|
|
|
23,700
|
|
|
|
2,377,821
|
|
|
Tim Hortons (Canada)
|
|
|
|
|
19,800
|
|
|
|
959,340
|
|
|
|
|
|
|
|
|
|
3,337,161
|
|
|
RETAIL
|
|
1.4%
|
|
|
|
|
|
|
|
|
|
Nordstrom
|
|
|
|
|
25,500
|
|
|
|
1,267,605
|
|
|
Ross Stores
|
|
|
|
|
25,600
|
|
|
|
1,216,768
|
|
|
|
|
|
|
|
|
|
2,484,373
|
|
|
SPECIALTY RETAIL
|
|
0.3%
|
|
|
|
|
|
|
|
|
|
PetSmart
|
|
|
|
|
5,300
|
|
|
|
271,837
|
|
|
Tiffany & Co.
|
|
|
|
|
3,000
|
|
|
|
198,780
|
|
|
|
|
|
|
|
|
|
470,617
|
|
|
TOTAL CONSUMERCYCLICAL
|
|
|
|
|
|
|
10,840,197
|
|
|
CONSUMERNON-CYCLICAL
|
|
5.0%
|
|
|
|
|
|
|
|
|
|
AGRICULTURE
|
|
1.1%
|
|
|
|
|
|
|
|
|
|
Philip Morris International
a
|
|
|
|
|
25,000
|
|
|
|
1,962,000
|
|
|
BASIC MATERIALS
|
|
0.4%
|
|
|
|
|
|
|
|
|
|
Archer-Daniels-Midland Co.
|
|
|
|
|
25,700
|
|
|
|
735,020
|
|
|
BEVERAGE
|
|
0.5%
|
|
|
|
|
|
|
|
|
|
PepsiCo
|
|
|
|
|
13,300
|
|
|
|
882,455
|
|
|
See accompanying notes to financial statements.
7
COHEN & STEERS DIVIDEND MAJORS FUND, INC.
SCHEDULE OF INVESTMENTS(Continued)
December 31, 2011
|
|
|
|
Number
of Shares
|
|
Value
|
|
COSMETICS/PERSONAL CARE
|
|
0.8%
|
|
|
|
|
|
|
|
|
|
Procter & Gamble Co.
a
|
|
|
|
|
21,300
|
|
|
$
|
1,420,923
|
|
|
RETAIL
|
|
2.2%
|
|
|
|
|
|
|
|
|
|
Costco Wholesale Corp.
|
|
|
|
|
14,100
|
|
|
|
1,174,812
|
|
|
CVS Caremark Corp.
a
|
|
|
|
|
49,200
|
|
|
|
2,006,376
|
|
|
Wal-Mart Stores
|
|
|
|
|
9,200
|
|
|
|
549,792
|
|
|
|
|
|
|
|
|
|
3,730,980
|
|
|
TOTAL CONSUMERNON-CYCLICAL
|
|
|
|
|
|
|
8,731,378
|
|
|
ENERGY
|
|
6.3%
|
|
|
|
|
|
|
|
|
|
OIL & GAS
|
|
5.6%
|
|
|
|
|
|
|
|
|
|
Apache Corp.
|
|
|
|
|
11,600
|
|
|
|
1,050,728
|
|
|
Chevron Corp.
a
|
|
|
|
|
26,800
|
|
|
|
2,851,520
|
|
|
Devon Energy Corp.
|
|
|
|
|
11,800
|
|
|
|
731,600
|
|
|
Exxon Mobil Corp.
a
|
|
|
|
|
31,600
|
|
|
|
2,678,416
|
|
|
Marathon Petroleum Corp.
|
|
|
|
|
25,700
|
|
|
|
855,553
|
|
|
Occidental Petroleum Corp.
a
|
|
|
|
|
17,000
|
|
|
|
1,592,900
|
|
|
|
|
|
|
|
|
|
9,760,717
|
|
|
OIL & GAS SERVICES
|
|
0.7%
|
|
|
|
|
|
|
|
|
|
Halliburton Co.
|
|
|
|
|
19,400
|
|
|
|
669,494
|
|
|
Schlumberger Ltd.
|
|
|
|
|
7,900
|
|
|
|
539,649
|
|
|
|
|
|
|
|
|
|
1,209,143
|
|
|
TOTAL ENERGY
|
|
|
|
|
|
|
10,969,860
|
|
|
FINANCIAL
|
|
6.8%
|
|
|
|
|
|
|
|
|
|
BANK
|
|
2.3%
|
|
|
|
|
|
|
|
|
|
Bank of America Corp.
|
|
|
|
|
56,300
|
|
|
|
313,028
|
|
|
Bank of New York Mellon Corp.
a
|
|
|
|
|
17,500
|
|
|
|
348,425
|
|
|
Comerica
|
|
|
|
|
25,500
|
|
|
|
657,900
|
|
|
Toronto-Dominion Bank (Canada)
|
|
|
|
|
8,400
|
|
|
|
629,041
|
|
|
US Bancorp
|
|
|
|
|
48,400
|
|
|
|
1,309,220
|
|
|
Wells Fargo & Co.
|
|
|
|
|
28,000
|
|
|
|
771,680
|
|
|
|
|
|
|
|
|
|
4,029,294
|
|
|
CREDIT CARD
|
|
0.8%
|
|
|
|
|
|
|
|
|
|
American Express Co.
a
|
|
|
|
|
27,900
|
|
|
|
1,316,043
|
|
|
See accompanying notes to financial statements.
8
COHEN & STEERS DIVIDEND MAJORS FUND, INC.
SCHEDULE OF INVESTMENTS(Continued)
December 31, 2011
|
|
|
|
Number
of Shares
|
|
Value
|
|
DIVERSIFIED FINANCIAL SERVICE
|
|
1.9%
|
|
|
|
|
|
|
|
|
|
Citigroup
a
|
|
|
|
|
17,700
|
|
|
$
|
465,687
|
|
|
Franklin Resources
|
|
|
|
|
7,300
|
|
|
|
701,238
|
|
|
Goldman Sachs Group
|
|
|
|
|
3,400
|
|
|
|
307,462
|
|
|
JPMorgan Chase & Co.
a
|
|
|
|
|
52,500
|
|
|
|
1,745,625
|
|
|
|
|
|
|
|
|
|
3,220,012
|
|
|
INSURANCE
|
|
1.8%
|
|
|
|
|
|
|
|
|
|
Chubb Corp.
a
|
|
|
|
|
12,700
|
|
|
|
879,094
|
|
|
Power Corp. (Canada)
|
|
|
|
|
32,600
|
|
|
|
762,240
|
|
|
Prudential Financial
a
|
|
|
|
|
27,600
|
|
|
|
1,383,312
|
|
|
|
|
|
|
|
|
|
3,024,646
|
|
|
TOTAL FINANCIAL
|
|
|
|
|
|
|
11,589,995
|
|
|
HEALTH CARE
|
|
6.1%
|
|
|
|
|
|
|
|
|
|
BIOTECHNOLOGY
|
|
0.3%
|
|
|
|
|
|
|
|
|
|
Amgen
|
|
|
|
|
7,000
|
|
|
|
449,470
|
|
|
HEALTH CARE PROVIDERS & SERVICES
|
|
1.2%
|
|
|
|
|
|
|
|
|
|
UnitedHealth Group
a
|
|
|
|
|
40,900
|
|
|
|
2,072,812
|
|
|
HEALTHCARE PRODUCTS
|
|
2.5%
|
|
|
|
|
|
|
|
|
|
Becton Dickinson & Co.
a
|
|
|
|
|
10,600
|
|
|
|
792,032
|
|
|
Covidien PLC
|
|
|
|
|
30,900
|
|
|
|
1,390,809
|
|
|
Johnson & Johnson
a
|
|
|
|
|
19,100
|
|
|
|
1,252,578
|
|
|
Patterson Cos.
|
|
|
|
|
27,100
|
|
|
|
799,992
|
|
|
|
|
|
|
|
|
|
4,235,411
|
|
|
PHARMACEUTICAL
|
|
2.1%
|
|
|
|
|
|
|
|
|
|
Abbott Laboratories
a
|
|
|
|
|
23,800
|
|
|
|
1,338,274
|
|
|
Merck & Co.
a
|
|
|
|
|
36,400
|
|
|
|
1,372,280
|
|
|
Pfizer
|
|
|
|
|
39,400
|
|
|
|
852,616
|
|
|
|
|
|
|
|
|
|
3,563,170
|
|
|
TOTAL HEALTH CARE
|
|
|
|
|
|
|
10,320,863
|
|
|
See accompanying notes to financial statements.
9
COHEN & STEERS DIVIDEND MAJORS FUND, INC.
SCHEDULE OF INVESTMENTS(Continued)
December 31, 2011
|
|
|
|
Number
of Shares
|
|
Value
|
|
INDUSTRIAL
|
|
4.8%
|
|
|
|
|
|
|
|
|
|
AEROSPACE & DEFENSE
|
|
1.7%
|
|
|
|
|
|
|
|
|
|
General Dynamics Corp.
|
|
|
|
|
11,700
|
|
|
$
|
776,997
|
|
|
L-3 Communications Holdings
|
|
|
|
|
6,600
|
|
|
|
440,088
|
|
|
Lockheed Martin Corp.
|
|
|
|
|
10,500
|
|
|
|
849,450
|
|
|
United Technologies Corp.
|
|
|
|
|
12,100
|
|
|
|
884,389
|
|
|
|
|
|
|
|
|
|
2,950,924
|
|
|
DIVERSIFIED MANUFACTURING
|
|
1.2%
|
|
|
|
|
|
|
|
|
|
Eaton Corp.
|
|
|
|
|
15,300
|
|
|
|
666,009
|
|
|
General Electric Co.
a
|
|
|
|
|
74,800
|
|
|
|
1,339,668
|
|
|
|
|
|
|
|
|
|
2,005,677
|
|
|
ELECTRICAL EQUIPMENT
|
|
0.5%
|
|
|
|
|
|
|
|
|
|
Emerson Electric Co.
|
|
|
|
|
19,100
|
|
|
|
889,869
|
|
|
MACHINERY
|
|
0.2%
|
|
|
|
|
|
|
|
|
|
Finning International (Canada)
|
|
|
|
|
16,200
|
|
|
|
353,180
|
|
|
TRANSPORTATION
|
|
1.2%
|
|
|
|
|
|
|
|
|
|
Norfolk Southern Corp.
|
|
|
|
|
13,800
|
|
|
|
1,005,468
|
|
|
United Parcel Service
|
|
|
|
|
14,400
|
|
|
|
1,053,936
|
|
|
|
|
|
|
|
|
|
2,059,404
|
|
|
TOTAL INDUSTRIAL
|
|
|
|
|
|
|
8,259,054
|
|
|
MATERIALS
|
|
1.2%
|
|
|
|
|
|
|
|
|
|
CHEMICALS
|
|
0.6%
|
|
|
|
|
|
|
|
|
|
Dow Chemical Co.
|
|
|
|
|
23,700
|
|
|
|
681,612
|
|
|
Potash Corp. of Saskatchewan (Canada)
|
|
|
|
|
10,000
|
|
|
|
413,350
|
|
|
|
|
|
|
|
|
|
1,094,962
|
|
|
METALS & MINING
|
|
0.6%
|
|
|
|
|
|
|
|
|
|
Freeport-McMoRan Copper & Gold
|
|
|
|
|
9,400
|
|
|
|
345,826
|
|
|
Newmont Mining Corp.
|
|
|
|
|
10,700
|
|
|
|
642,107
|
|
|
|
|
|
|
|
|
|
987,933
|
|
|
TOTAL MATERIALS
|
|
|
|
|
|
|
2,082,895
|
|
|
See accompanying notes to financial statements.
10
COHEN & STEERS DIVIDEND MAJORS FUND, INC.
SCHEDULE OF INVESTMENTS(Continued)
December 31, 2011
|
|
|
|
Number
of Shares
|
|
Value
|
|
REAL ESTATE
|
|
49.6%
|
|
|
|
|
|
|
|
|
|
DIVERSIFIED
|
|
2.4%
|
|
|
|
|
|
|
|
|
|
American Assets Trust
|
|
|
|
|
33,262
|
|
|
$
|
682,204
|
|
|
Lexington Realty Trust
|
|
|
|
|
112,500
|
|
|
|
842,625
|
|
|
Vornado Realty Trust
|
|
|
|
|
33,251
|
|
|
|
2,555,672
|
|
|
|
|
|
|
|
|
|
4,080,501
|
|
|
HEALTH CARE
|
|
5.0%
|
|
|
|
|
|
|
|
|
|
HCP
|
|
|
|
|
112,863
|
|
|
|
4,675,914
|
|
|
Healthcare Realty Trust
|
|
|
|
|
67,700
|
|
|
|
1,258,543
|
|
|
Senior Housing Properties Trust
|
|
|
|
|
117,700
|
|
|
|
2,641,188
|
|
|
|
|
|
|
|
|
|
8,575,645
|
|
|
HOTEL
|
|
2.7%
|
|
|
|
|
|
|
|
|
|
Hersha Hospitality Trust
|
|
|
|
|
161,239
|
|
|
|
786,846
|
|
|
Host Hotels & Resorts
|
|
|
|
|
143,468
|
|
|
|
2,119,022
|
|
|
Hyatt Hotels Corp., Class A
b
|
|
|
|
|
22,912
|
|
|
|
862,408
|
|
|
Starwood Hotels & Resorts Worldwide
|
|
|
|
|
17,600
|
|
|
|
844,272
|
|
|
|
|
|
|
|
|
|
4,612,548
|
|
|
INDUSTRIAL
|
|
3.0%
|
|
|
|
|
|
|
|
|
|
DCT Industrial Trust
|
|
|
|
|
191,900
|
|
|
|
982,528
|
|
|
First Industrial Realty Trust
b
|
|
|
|
|
73,500
|
|
|
|
751,905
|
|
|
ProLogis
|
|
|
|
|
121,189
|
|
|
|
3,464,794
|
|
|
|
|
|
|
|
|
|
5,199,227
|
|
|
OFFICE
|
|
9.0%
|
|
|
|
|
|
|
|
|
|
Alexandria Real Estate Equities
|
|
|
|
|
25,300
|
|
|
|
1,744,941
|
|
|
BioMed Realty Trust
|
|
|
|
|
47,000
|
|
|
|
849,760
|
|
|
Boston Properties
|
|
|
|
|
49,600
|
|
|
|
4,940,160
|
|
|
Douglas Emmett
|
|
|
|
|
58,400
|
|
|
|
1,065,216
|
|
|
Highwoods Properties
|
|
|
|
|
29,100
|
|
|
|
863,397
|
|
|
Hudson Pacific Properties
|
|
|
|
|
73,276
|
|
|
|
1,037,588
|
|
|
Kilroy Realty Corp.
|
|
|
|
|
55,263
|
|
|
|
2,103,862
|
|
|
Liberty Property Trust
|
|
|
|
|
40,000
|
|
|
|
1,235,200
|
|
|
SL Green Realty Corp.
|
|
|
|
|
26,382
|
|
|
|
1,758,097
|
|
|
|
|
|
|
|
|
|
15,598,221
|
|
|
See accompanying notes to financial statements.
11
COHEN & STEERS DIVIDEND MAJORS FUND, INC.
SCHEDULE OF INVESTMENTS(Continued)
December 31, 2011
|
|
|
|
Number
of Shares
|
|
Value
|
|
RESIDENTIAL
|
|
9.9%
|
|
|
|
|
|
|
|
|
|
APARTMENT
|
|
9.2%
|
|
|
|
|
|
|
|
|
|
American Campus Communities
|
|
|
|
|
21,100
|
|
|
$
|
885,356
|
|
|
Apartment Investment & Management Co.
|
|
|
|
|
55,700
|
|
|
|
1,276,087
|
|
|
AvalonBay Communities
|
|
|
|
|
20,100
|
|
|
|
2,625,060
|
|
|
Education Realty Trust
|
|
|
|
|
135,739
|
|
|
|
1,388,610
|
|
|
Equity Residential
|
|
|
|
|
90,971
|
|
|
|
5,188,076
|
|
|
Essex Property Trust
|
|
|
|
|
12,800
|
|
|
|
1,798,528
|
|
|
Mid-America Apartment Communities
|
|
|
|
|
20,800
|
|
|
|
1,301,040
|
|
|
UDR
|
|
|
|
|
57,932
|
|
|
|
1,454,093
|
|
|
|
|
|
|
|
|
|
15,916,850
|
|
|
MANUFACTURED HOME
|
|
0.7%
|
|
|
|
|
|
|
|
|
|
Equity Lifestyle Properties
|
|
|
|
|
18,831
|
|
|
|
1,255,840
|
|
|
TOTAL RESIDENTIAL
|
|
|
|
|
|
|
17,172,690
|
|
|
SELF STORAGE
|
|
3.8%
|
|
|
|
|
|
|
|
|
|
CubeSmart
|
|
|
|
|
178,200
|
|
|
|
1,896,048
|
|
|
Extra Space Storage
|
|
|
|
|
53,900
|
|
|
|
1,305,997
|
|
|
Public Storage
|
|
|
|
|
18,400
|
|
|
|
2,474,064
|
|
|
Sovran Self Storage
|
|
|
|
|
22,717
|
|
|
|
969,334
|
|
|
|
|
|
|
|
|
|
6,645,443
|
|
|
SHOPPING CENTER
|
|
12.8%
|
|
|
|
|
|
|
|
|
|
COMMUNITY CENTER
|
|
4.0%
|
|
|
|
|
|
|
|
|
|
Acadia Realty Trust
|
|
|
|
|
63,298
|
|
|
|
1,274,822
|
|
|
Equity One
|
|
|
|
|
54,100
|
|
|
|
918,618
|
|
|
Federal Realty Investment Trust
|
|
|
|
|
9,894
|
|
|
|
897,881
|
|
|
Regency Centers Corp.
|
|
|
|
|
41,010
|
|
|
|
1,542,796
|
|
|
Tanger Factory Outlet Centers
|
|
|
|
|
31,800
|
|
|
|
932,376
|
|
|
Weingarten Realty Investors
|
|
|
|
|
59,966
|
|
|
|
1,308,458
|
|
|
|
|
|
|
|
|
|
6,874,951
|
|
|
FREE STANDING
|
|
0.8%
|
|
|
|
|
|
|
|
|
|
National Retail Properties
|
|
|
|
|
50,400
|
|
|
|
1,329,552
|
|
|
See accompanying notes to financial statements.
12
COHEN & STEERS DIVIDEND MAJORS FUND, INC.
SCHEDULE OF INVESTMENTS(Continued)
December 31, 2011
|
|
|
|
Number
of Shares
|
|
Value
|
|
REGIONAL MALL
|
|
8.0%
|
|
|
|
|
|
|
|
|
|
CBL & Associates Properties
|
|
|
|
|
23,963
|
|
|
$
|
376,219
|
|
|
Macerich Co.
|
|
|
|
|
23,811
|
|
|
|
1,204,836
|
|
|
Simon Property Group
|
|
|
|
|
86,171
|
|
|
|
11,110,889
|
|
|
Taubman Centers
|
|
|
|
|
19,300
|
|
|
|
1,198,530
|
|
|
|
|
|
|
|
|
|
13,890,474
|
|
|
TOTAL SHOPPING CENTER
|
|
|
|
|
|
|
22,094,977
|
|
|
SPECIALTY
|
|
1.0%
|
|
|
|
|
|
|
|
|
|
Digital Realty Trust
|
|
|
|
|
24,800
|
|
|
|
1,653,416
|
|
|
TOTAL REAL ESTATE
|
|
|
|
|
|
|
85,632,668
|
|
|
TECHNOLOGY
|
|
9.8%
|
|
|
|
|
|
|
|
|
|
COMPUTERS
|
|
2.5%
|
|
|
|
|
|
|
|
|
|
Apple
a,b
|
|
|
|
|
6,500
|
|
|
|
2,632,500
|
|
|
International Business Machines Corp.
a
|
|
|
|
|
9,400
|
|
|
|
1,728,472
|
|
|
|
|
|
|
|
|
|
4,360,972
|
|
|
INTERNET SERVICE PROVIDER
|
|
0.9%
|
|
|
|
|
|
|
|
|
|
Google
b
|
|
|
|
|
2,500
|
|
|
|
1,614,750
|
|
|
SEMICONDUCTORS
|
|
0.7%
|
|
|
|
|
|
|
|
|
|
Avago Technologies Ltd. (Singapore) (USD)
|
|
|
|
|
14,200
|
|
|
|
409,812
|
|
|
Intel Corp.
|
|
|
|
|
20,800
|
|
|
|
504,400
|
|
|
Texas Instruments
|
|
|
|
|
8,300
|
|
|
|
241,613
|
|
|
|
|
|
|
|
|
|
1,155,825
|
|
|
SERVICES
|
|
1.4%
|
|
|
|
|
|
|
|
|
|
Visa, Class A
a
|
|
|
|
|
22,900
|
|
|
|
2,325,037
|
|
|
SOFTWARE
|
|
2.6%
|
|
|
|
|
|
|
|
|
|
Microsoft Corp.
|
|
|
|
|
33,800
|
|
|
|
877,448
|
|
|
Oracle Corp.
a
|
|
|
|
|
96,200
|
|
|
|
2,467,530
|
|
|
Symantec Corp.
b
|
|
|
|
|
78,200
|
|
|
|
1,223,830
|
|
|
|
|
|
|
|
|
|
4,568,808
|
|
|
See accompanying notes to financial statements.
13
COHEN & STEERS DIVIDEND MAJORS FUND, INC.
SCHEDULE OF INVESTMENTS(Continued)
December 31, 2011
|
|
|
|
Number
of Shares
|
|
Value
|
|
TELECOMMUNICATION EQUIPMENT
|
|
|
1.7%
|
|
|
|
|
|
|
|
|
|
|
Corning
|
|
|
|
|
33,300
|
|
|
$
|
432,234
|
|
|
Harris Corp.
|
|
|
|
|
10,200
|
|
|
|
367,608
|
|
|
QUALCOMM
a
|
|
|
|
|
39,500
|
|
|
|
2,160,650
|
|
|
|
|
|
|
|
|
|
2,960,492
|
|
|
TOTAL TECHNOLOGY
|
|
|
|
|
|
|
16,985,884
|
|
|
TELECOMMUNICATION SERVICES
|
|
|
1.5%
|
|
|
|
|
|
|
|
|
|
|
AT&T
a
|
|
|
|
|
51,400
|
|
|
|
1,554,336
|
|
|
Rogers Communications (Canada)
|
|
|
|
|
27,500
|
|
|
|
1,059,509
|
|
|
|
|
|
|
|
|
|
2,613,845
|
|
|
UTILITIES
|
|
|
2.1%
|
|
|
|
|
|
|
|
|
|
|
ELECTRIC UTILITIES
|
|
|
0.7%
|
|
|
|
|
|
|
|
|
|
|
NextEra Energy
|
|
|
|
|
20,700
|
|
|
|
1,260,216
|
|
|
MULTI UTILITIES
|
|
|
1.4%
|
|
|
|
|
|
|
|
|
|
|
PG&E Corp.
|
|
|
|
|
21,600
|
|
|
|
890,352
|
|
|
Wisconsin Energy Corp.
a
|
|
|
|
|
44,100
|
|
|
|
1,541,736
|
|
|
|
|
|
|
|
|
|
2,432,088
|
|
|
TOTAL UTILITIES
|
|
|
|
|
|
|
3,692,304
|
|
|
TOTAL COMMON STOCK
(Identified cost$141,211,385)
|
|
|
|
|
|
|
171,718,943
|
|
|
SHORT-TERM INVESTMENTS
|
|
|
1.1%
|
|
|
|
|
|
|
|
|
|
|
MONEY MARKET FUNDS
|
|
BlackRock Liquidity Funds: FedFund, 0.01%
c
|
|
|
|
|
1,000,041
|
|
|
|
1,000,041
|
|
|
Federated Government Obligations Fund, 0.01%
c
|
|
|
|
|
950,027
|
|
|
|
950,027
|
|
|
TOTAL SHORT-TERM INVESTMENTS
(Identified cost$1,950,068)
|
|
|
|
|
|
|
1,950,068
|
|
|
TOTAL INVESTMENTS (Identified cost$143,161,453)
|
|
|
100.5
|
%
|
|
|
|
|
|
|
173,669,011
|
|
|
WRITTEN CALL OPTIONS
|
|
|
(0.6
|
)
|
|
|
|
|
|
|
(1,044,755
|
)
|
|
OTHER ASSETS IN EXCESS OF LIABILITIES
|
|
|
0.1
|
%
|
|
|
|
|
|
|
132,141
|
|
|
NET ASSETS (Equivalent to $13.69 per share based
on 12,621,954 shares of common
stock outstanding)
|
|
|
100.0
|
%
|
|
|
|
|
|
$
|
172,756,397
|
|
|
See accompanying notes to financial statements.
14
COHEN & STEERS DIVIDEND MAJORS FUND, INC.
SCHEDULE OF INVESTMENTS(Continued)
December 31, 2011
|
|
|
|
Number of
Contracts
|
|
Value
|
|
WRITTEN CALL OPTIONS
|
|
(0.6)%
|
|
|
|
|
|
|
|
|
|
S&P 500 Index, USD Strike Price 1,235, 1/21/12
|
|
|
|
|
23
|
|
|
$
|
(89,815
|
)
|
|
S&P 500 Index, USD Strike Price 1,245, 1/21/12
|
|
|
|
|
139
|
|
|
|
(464,260
|
)
|
|
S&P 500 Index, USD Strike Price 1,250, 1/21/12
|
|
|
|
|
174
|
|
|
|
(490,680
|
)
|
|
TOTAL WRITTEN CALL OPTIONS
(Premiums Received$687,168)
|
|
|
|
|
|
$
|
(1,044,755
|
)
|
|
Glossary of Portfolio Abbreviation
USD United States Dollar
Note: Percentages indicated are based on the net assets of the Fund.
a
All or a portion of the security is pledged in connection with written option contracts: $16,872,271 has been pledged to brokers.
b
Non-income producing security.
c
Rate quoted represents the seven day yield of the fund.
See accompanying notes to financial statements.
15
COHEN & STEERS DIVIDEND MAJORS FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
December 31, 2011
ASSETS:
|
|
Investments in securities, at value (Identified cost$143,161,453)
|
|
$
|
173,669,011
|
|
|
Cash
|
|
|
58,532
|
|
|
Foreign currency, at value (Identified cost$7,872)
|
|
|
7,888
|
|
|
Receivable for:
|
|
Dividends
|
|
|
421,422
|
|
|
Investment securities sold
|
|
|
129,540
|
|
|
Other assets
|
|
|
3,260
|
|
|
Total Assets
|
|
|
174,289,653
|
|
|
LIABILITIES:
|
|
Payable for:
|
|
Options (Premiums received $687,168)
|
|
|
1,044,755
|
|
|
Dividends declared
|
|
|
198,358
|
|
|
Investment management fees
|
|
|
108,803
|
|
|
Investment securities purchased
|
|
|
91,554
|
|
|
Administration fees
|
|
|
5,803
|
|
|
Other liabilities
|
|
|
83,983
|
|
|
Total Liabilities
|
|
|
1,533,256
|
|
|
NET ASSETS
|
|
$
|
172,756,397
|
|
|
NET ASSETS consist of:
|
|
Paid-in capital
|
|
$
|
187,622,872
|
|
|
Accumulated undistributed net investment income
|
|
|
187,764
|
|
|
Accumulated net realized loss
|
|
|
(45,204,302
|
)
|
|
Net unrealized appreciation
|
|
|
30,150,063
|
|
|
|
|
$
|
172,756,397
|
|
|
NET ASSET VALUE PER SHARE:
|
|
($172,756,397 ÷ 12,621,954 shares outstanding)
|
|
$
|
13.69
|
|
|
MARKET PRICE PER SHARE
|
|
$
|
12.09
|
|
|
MARKET PRICE DISCOUNT TO NET ASSET VALUE PER SHARE
|
|
|
(11.69
|
)%
|
|
See accompanying notes to financial statements.
16
COHEN & STEERS DIVIDEND MAJORS FUND, INC.
STATEMENT OF OPERATIONS
For the Year Ended December 31, 2011
Investment Income:
|
|
Dividend income (net of $19,189 of foreign withholding tax)
|
|
$
|
3,665,566
|
|
|
Expenses:
|
|
Investment management fees
|
|
|
1,322,998
|
|
|
Administration fees
|
|
|
106,787
|
|
|
Professional fees
|
|
|
76,915
|
|
|
Custodian fees and expenses
|
|
|
50,709
|
|
|
Shareholder reporting expenses
|
|
|
41,778
|
|
|
Transfer agent fees and expenses
|
|
|
22,434
|
|
|
Directors' fees and expenses
|
|
|
16,398
|
|
|
Miscellaneous
|
|
|
39,410
|
|
|
Total Expenses
|
|
|
1,677,429
|
|
|
Net Investment Income
|
|
|
1,988,137
|
|
|
Net Realized and Unrealized Gain (Loss):
|
|
Net realized gain on:
|
|
Investments
|
|
|
7,077,845
|
|
|
Options
|
|
|
2,059,055
|
|
|
Foreign currency transactions
|
|
|
2,176
|
|
|
Net realized gain
|
|
|
9,139,076
|
|
|
Net change in unrealized appreciation (depreciation) on:
|
|
Investments
|
|
|
(2,019,342
|
)
|
|
Options
|
|
|
(216,886
|
)
|
|
Foreign currency translations
|
|
|
289
|
|
|
Net change in unrealized appreciation (depreciation)
|
|
|
(2,235,939
|
)
|
|
Net realized and unrealized gain
|
|
|
6,903,137
|
|
|
Net Increase in Net Assets Resulting from Operations
|
|
$
|
8,891,274
|
|
|
See accompanying notes to financial statements.
17
COHEN & STEERS DIVIDEND MAJORS FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
|
|
For the
Year Ended
December 31, 2011
|
|
For the
Year Ended
December 31, 2010
|
|
Change in Net Assets:
|
|
From Operations:
|
|
Net investment income
|
|
$
|
1,988,137
|
|
|
$
|
1,886,825
|
|
|
Net realized gain
|
|
|
9,139,076
|
|
|
|
12,895,408
|
|
|
Net change in unrealized appreciation
(depreciation)
|
|
|
(2,235,939
|
)
|
|
|
11,097,645
|
|
|
Net increase in net assets resulting
from operations
|
|
|
8,891,274
|
|
|
|
25,879,878
|
|
|
Dividends and Distributions to Shareholders from:
|
|
Net investment income
|
|
|
(11,316,912
|
)
|
|
|
(8,988,232
|
)
|
|
Tax return of capital
|
|
|
(297,904
|
)
|
|
|
|
|
|
Total dividends and distributions to
shareholders
|
|
|
(11,614,816
|
)
|
|
|
(8,988,232
|
)
|
|
Capital Stock Transactions:
|
|
Decrease in net assets from Fund share
transactions
|
|
|
(46,538
|
)
|
|
|
(981,439
|
)
|
|
Total increase (decrease) in net assets
|
|
|
(2,770,080
|
)
|
|
|
15,910,207
|
|
|
Net Assets:
|
|
Beginning of year
|
|
|
175,526,477
|
|
|
|
159,616,270
|
|
|
End of year
a
|
|
$
|
172,756,397
|
|
|
$
|
175,526,477
|
|
|
a
Includes accumulated undistributed net investment income of $187,764 and $126,159, respectively.
See accompanying notes to financial statements.
18
COHEN & STEERS DIVIDEND MAJORS FUND, INC.
FINANCIAL HIGHLIGHTS
The following table includes selected data for a share outstanding throughout each year and other performance information derived from the financial statements. It should be read in conjunction with the financial statements and notes thereto.
|
|
For the Year Ended December 31,
|
|
Per Share Operating Performance:
|
|
2011
|
|
2010
|
|
2009
|
|
2008
|
|
2007
|
|
Net asset value, beginning of year
|
|
$
|
13.90
|
|
|
$
|
12.55
|
|
|
$
|
11.76
|
|
|
$
|
19.29
|
|
|
$
|
23.12
|
|
|
Income from investment operations:
|
|
Net investment income
|
|
|
0.90
|
|
|
|
0.71
|
|
|
|
0.26
|
|
|
|
0.54
|
|
|
|
0.53
|
|
|
Net realized and unrealized gain (loss)
|
|
|
(0.19
|
)
|
|
|
1.34
|
|
|
|
1.10
|
|
|
|
(6.62
|
)
|
|
|
(2.46
|
)
|
|
Total income (loss) from investment
operations
|
|
|
0.71
|
|
|
|
2.05
|
|
|
|
1.36
|
|
|
|
(6.08
|
)
|
|
|
(1.93
|
)
|
|
Less dividends and distributions to shareholders
from:
|
|
Net investment income
|
|
|
(0.90
|
)
|
|
|
(0.71
|
)
|
|
|
(0.26
|
)
|
|
|
(0.54
|
)
|
|
|
(0.51
|
)
|
|
Net realized gain
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.66
|
)
|
|
Tax return of capital
|
|
|
(0.02
|
)
|
|
|
|
|
|
|
(0.31
|
)
|
|
|
(0.93
|
)
|
|
|
(0.73
|
)
|
|
Total dividends and distributions to
shareholders
|
|
|
(0.92
|
)
|
|
|
(0.71
|
)
|
|
|
(0.57
|
)
|
|
|
(1.47
|
)
|
|
|
(1.90
|
)
|
|
Anti-dilutive effect from the purchase of
common shares
|
|
|
0.00
|
a
|
|
|
0.01
|
|
|
|
|
|
|
|
0.02
|
|
|
|
|
|
|
Net increase (decrease) in net asset value
|
|
|
(0.21
|
)
|
|
|
1.35
|
|
|
|
0.79
|
|
|
|
(7.53
|
)
|
|
|
(3.83
|
)
|
|
Net asset value, end of year
|
|
$
|
13.69
|
|
|
$
|
13.90
|
|
|
$
|
12.55
|
|
|
$
|
11.76
|
|
|
$
|
19.29
|
|
|
Market value, end of year
|
|
$
|
12.09
|
|
|
$
|
12.96
|
|
|
$
|
10.45
|
|
|
$
|
9.65
|
|
|
$
|
16.85
|
|
|
Total net asset value return
b
|
|
|
5.75
|
%
|
|
|
17.67
|
%
|
|
|
13.79
|
%
|
|
|
32.21
|
%
|
|
|
7.64
|
%
|
|
Total market value return
b
|
|
|
0.17
|
%
|
|
|
31.76
|
%
|
|
|
15.47
|
%
|
|
|
36.32
|
%
|
|
|
9.45
|
%
|
|
Ratios/Supplemental Data:
|
|
Net assets, end of year (in millions)
|
|
$
|
172.8
|
|
|
$
|
175.5
|
|
|
$
|
159.6
|
|
|
$
|
149.6
|
|
|
$
|
247.0
|
|
|
Ratio of expenses to average daily net assets
|
|
|
0.95
|
%
|
|
|
0.98
|
%
|
|
|
1.07
|
%
|
|
|
0.97
|
%
|
|
|
0.92
|
%
|
|
Ratio of net investment income to average daily
net assets
|
|
|
1.13
|
%
|
|
|
1.15
|
%
|
|
|
2.49
|
%
|
|
|
3.27
|
%
|
|
|
2.35
|
%
|
|
Portfolio turnover rate
|
|
|
61
|
%
|
|
|
94
|
%
|
|
|
128
|
%
|
|
|
47
|
%
|
|
|
41
|
%
|
|
a
Amount is less than $0.005.
b
Total market value return is computed based upon the New York Stock Exchange market price of the Fund's shares and excludes the effects of brokerage commissions. Total net asset value return measures the changes in value over the period indicated, taking into account dividends as reinvested. Dividends and distributions, if any, are assumed for purposes of these calculations, to be reinvested at prices obtained under the Fund's dividend reinvestment plan.
See accompanying notes to financial statements.
19
COHEN & STEERS DIVIDEND MAJORS FUND, INC.
NOTES TO FINANCIAL STATEMENTS
Note 1. Significant Accounting Policies
Cohen & Steers Dividend Majors Fund, Inc. (the Fund) was incorporated under the laws of the State of Maryland on September 13, 2004 and is registered under the Investment Company Act of 1940 as amended, as a diversified, closed-end management investment company. The Fund's investment objective is to achieve high total return.
The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America (GAAP). The preparation of the financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
Portfolio Valuation:
Investments in securities that are listed on the New York Stock Exchange are valued, except as indicated below, at the last sale price reflected at the close of the New York Stock Exchange on the business day as of which such value is being determined. If there has been no sale on such day, the securities are valued at the mean of the closing bid and asked prices on such day or, if no asked price is available, at the bid price. Exchange traded options are valued at their last sale price as of the close of options trading on applicable exchanges. In the absence of a last sale, options are valued at the average of the quoted bid and asked prices as of the close of business. Over-the-counter options quotations are provided by the respective counterparty when such prices are believed by Cohen & Steers Capital Management, Inc. (the investment manager), pursuant to delegation by the Board of Directors, to reflect the fair market value.
Securities not listed on the New York Stock Exchange but listed on other domestic or foreign securities exchanges are valued in a similar manner. Securities traded on more than one securities exchange are valued at the last sale price on the business day as of which such value is being determined as reflected on the tape at the close of the exchange representing the principal market for such securities. If after the close of a foreign market, but prior to the close of business on the day the securities are being valued, market conditions change significantly, certain foreign securities may be fair valued pursuant to procedures established by the Board of Directors.
Readily marketable securities traded in the over-the-counter market, including listed securities whose primary market is believed by the investment manager to be over-the-counter, are valued at the official closing prices as reported by sources as the Board of Directors deem appropriate to reflect their fair market value. If there has been no sale on such day, the securities are valued at the mean of the closing bid and asked prices on such day, or if no asked price is available, at the bid price.
Securities for which market prices are unavailable, or securities for which the investment manager determines that the bid and/or asked price or a counterparty valuation does not reflect market value, will be valued at fair value pursuant to procedures approved by the Fund's Board of Directors. Circumstances in which market prices may be unavailable include, but are not limited to, when trading in a security is suspended, the exchange on which the security is traded is subject to an unscheduled close or disruption or material events occur after the close of the exchange on which the security is
20
COHEN & STEERS DIVIDEND MAJORS FUND, INC.
NOTES TO FINANCIAL STATEMENTS(Continued)
principally traded. In these circumstances, the Fund determines fair value in a manner that fairly reflects the market value of the security on the valuation date based on consideration of any information or factors it deems appropriate. These may include, but are not limited to, recent transactions in comparable securities, information relating to the specific security and developments in the markets.
The Fund's use of fair value pricing may cause the net asset value of Fund shares to differ from the net asset value that would be calculated using market quotations. Fair value pricing involves subjective judgments and it is possible that the fair value determined for a security may be materially different than the value that could be realized upon the sale of that security.
Short-term debt securities with a maturity date of 60 days or less are valued at amortized cost, which approximates value. Investments in open-end mutual funds are valued at their closing net asset value.
Fair value is defined as the price that the Fund would receive to sell an investment or pay to transfer a liability in an orderly transaction with an independent buyer in the principal market, or in the absence of a principal market the most advantageous market for the investment or liability. The hierarchy of inputs that are used in determining the fair value of the Fund's investments is summarized below.
• Level 1quoted prices in active markets for identical investments
• Level 2other significant observable inputs (including quoted prices for similar investments, interest rates, credit risk, etc.)
• Level 3significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments)
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used as of December 31, 2011 in valuing the Fund's investments carried at value:
|
|
Total
|
|
Quoted Prices
In Active
Market for
Identical Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Common Stock
|
|
$
|
171,718,943
|
|
|
$
|
171,718,943
|
|
|
$
|
|
|
|
|
|
|
|
Money Market Funds
|
|
|
1,950,068
|
|
|
|
|
|
|
|
1,950,068
|
|
|
|
|
|
|
Total Investments
|
|
$
|
173,669,011
|
|
|
$
|
171,718,943
|
|
|
$
|
1,950,068
|
|
|
|
|
|
|
Other Financial Instruments*
|
|
$
|
(1,044,755
|
)
|
|
$
|
(1,044,755
|
)
|
|
$
|
|
|
|
|
|
|
|
* Other financial instruments are written options contracts.
Security Transactions and Investment Income:
Security transactions are recorded on trade date. Realized gains and losses on investments sold are recorded on the basis of identified cost. Interest income is recorded on the accrual basis. Discounts are accreted and premiums are amortized over the
21
COHEN & STEERS DIVIDEND MAJORS FUND, INC.
NOTES TO FINANCIAL STATEMENTS(Continued)
life of the respective securities. Dividend income is recorded on the ex-dividend date, except for certain dividends on foreign securities, which are recorded as soon as the Fund is informed after the ex-dividend date. The Fund records distributions received in excess of income from underlying investments as a reduction of cost of investments and/or an increase in realized gain. Such amounts are based on estimates if actual amounts are not available, and actual amounts of income, realized gain and return of capital may differ from the estimated amounts. The Fund adjusts the estimated amounts of the components of distributions (and consequently its net investment income) as an increase to unrealized appreciation/(depreciation) and realized gain/(loss) on investments as necessary once the issuers provide information about the actual composition of the distributions.
Options:
The Fund writes call options on an index and may write put options on an index and put and covered call options on a security with the intention of earning option premiums. Option premiums may increase the Fund's realized gains and therefore may help increase distributable income. When a Fund writes (sells) an option, an amount equal to the premium received by the Fund is recorded in the Statement of Assets and Liabilities as a liability. The amount of the liability is subsequently marked-to-market to reflect the current market value of the option written. When an option expires, the Fund realizes a gain on the option to the extent of the premiums received. Premiums received from writing options which are exercised or closed, are added to or offset against the proceeds or amount paid on the transaction to determine the realized gain or loss. If a put option on a security is exercised, the premium reduces the cost basis of the security purchased by the Fund. If a call option is exercised, the call premium is added to the proceeds of the security sold to determine its gain or loss. The Fund, as writer of an option, bears the market risk of an unfavorable change in the price of the underlying index or security. Other risks include the possibility of an illiquid options market or the inability of the counterparties to fulfill their obligations under the contract.
Foreign Currency Translations:
The books and records of the Fund are maintained in U.S. dollars as follows: (1) the foreign currency market value of investment securities, other assets and liabilities and foreign currency contracts are translated at the exchange rates prevailing at the end of the period; and (2) purchases, sales, income and expenses are translated at the exchange rates prevailing on the respective dates of such transactions. The resultant exchange gains and losses are recorded as realized and unrealized gain/loss on foreign exchange transactions. Pursuant to U.S. federal income tax regulations, certain foreign exchange gains/losses included in realized and unrealized gain/loss are included in or are a reduction of ordinary income for federal income tax purposes. The Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the changes in the market prices of the securities.
Foreign Securities:
The Fund may directly purchase securities of foreign issuers. Investing in securities of foreign issuers involves special risks not typically associated with investing in securities of U.S. issuers. The risks include possible revaluation of currencies, the ability to repatriate funds, less complete financial information about companies and possible future adverse political and economic developments. Moreover, securities of many foreign issuers and their markets may be less liquid and their prices more volatile than those of securities of comparable U.S. issuers.
22
COHEN & STEERS DIVIDEND MAJORS FUND, INC.
NOTES TO FINANCIAL STATEMENTS(Continued)
Dividends and Distributions to Shareholders:
Dividends from net investment income and capital gain distributions are determined in accordance with U.S. federal income tax regulations, which may differ from GAAP. Dividends from net investment income, if any, are declared and paid quarterly. Net realized capital gains, unless offset by any available capital loss carryforward, are typically distributed to shareholders at least annually. Dividends and distributions to shareholders are recorded on the ex-dividend date and are automatically reinvested in full and fractional shares of the Fund in accordance with the Fund's Reinvestment Plan unless the shareholder has elected to have them paid in cash.
Distributions paid by the Fund are subject to recharacterization for tax purposes. Based upon the results of operations for the year ended December 31, 2011, a portion of the dividends have been reclassified to return of capital.
Income Taxes:
It is the policy of the Fund to continue to qualify as a regulated investment company, if such qualification is in the best interest of the shareholders, by complying with the requirements of Subchapter M of the Internal Revenue Code applicable to regulated investment companies, and by distributing substantially all of its taxable earnings to its shareholders. Accordingly, no provision for federal income or excise tax is necessary. Dividend and interest income from holdings in non-U.S. securities is recorded net of non-U.S. taxes paid. Management has analyzed the Fund's tax positions taken on federal income tax returns as well as its tax positions in non-U.S. jurisdictions where it trades for all open tax years and has concluded that as of December 31, 2011, no additional provisions for income tax would be required in the Fund's financial statements. The Fund's tax positions for the tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service, state departments of revenue and by foreign tax authorities.
Note 2. Investment Management Fees, Administration Fees and Other Transactions with Affiliates
Investment Management Fees:
The investment manager serves as the Fund's investment manager pursuant to an investment management agreement (the investment management agreement). Under the terms of the investment management agreement, the investment manager provides the Fund with day-to-day investment decisions and generally manages the Fund's investments in accordance with the stated policies of the Fund, subject to the supervision of the Board of Directors.
For the services under the investment management agreement, the Fund pays the investment manager an investment management fee, accrued daily and paid monthly, at an annual rate of 0.75% of the Fund's average daily net assets.
Administration Fees:
The Fund has entered into an administration agreement with the investment manager under which the investment manager performs certain administrative functions for the Fund and receives a fee, accrued daily and paid monthly, at the annual rate of 0.04% of the Fund's average daily net assets. For the year ended December 31, 2011, the Fund paid the investment manager $70,560 in fees under this administration agreement. Additionally, the Fund pays State Street Bank and Trust Company as co-administrator under a fund accounting and administration agreement.
Directors' and Officers' Fees:
Certain directors and officers of the Fund are also directors, officers, and/or employees of the investment manager. The Fund does not pay compensation to any directors
23
COHEN & STEERS DIVIDEND MAJORS FUND, INC.
NOTES TO FINANCIAL STATEMENTS(Continued)
and officers affiliated with the investment manager except for the Chief Compliance Officer, who received compensation from the investment manager that was reimbursed by the Fund in the amount of $2,853 for the year ended December 31, 2011.
Note 3. Purchases and Sales of Securities
Purchases and sales of securities, excluding short-term investments, for the year ended December 31, 2011, totaled $108,883,019 and $115,270,454, respectively.
Transactions in options written during the year ended December 31, 2011, were as follows:
|
|
Number
of Contracts
|
|
Premium
|
|
Options outstanding at December 31, 2010
|
|
|
327
|
|
|
$
|
548,269
|
|
|
Options written
|
|
|
4,004
|
|
|
|
7,537,612
|
|
|
Options terminated in closing transactions
|
|
|
(3,995
|
)
|
|
|
(7,398,713
|
)
|
|
Options outstanding at December 31, 2011
|
|
|
336
|
|
|
$
|
687,168
|
|
|
Note 4. Income Tax Information
The tax character of dividends and distributions paid was as follows:
|
|
For the Year Ended
December 31,
|
|
|
|
2011
|
|
2010
|
|
Ordinary income
|
|
$
|
11,316,912
|
|
|
$
|
8,988,232
|
|
|
Tax return of capital
|
|
|
297,904
|
|
|
|
|
|
|
Total dividends and distributions
|
|
$
|
11,614,816
|
|
|
$
|
8,988,232
|
|
|
As of December 31, 2011, the tax-basis components of accumulated earnings and the federal tax cost were as follows:
Cost for federal income tax purposes
|
|
$
|
144,210,679
|
|
|
Gross unrealized appreciation
|
|
$
|
33,343,722
|
|
|
Gross unrealized depreciation
|
|
|
(3,885,390
|
)
|
|
Net unrealized appreciation
|
|
|
29,458,332
|
|
|
Other cost basis adjustments
|
|
|
187,857
|
|
|
Total net unrealized depreciation
|
|
$
|
29,646,189
|
|
|
24
COHEN & STEERS DIVIDEND MAJORS FUND, INC.
NOTES TO FINANCIAL STATEMENTS(Continued)
As of December 31, 2011, the Fund had a net capital loss carryforward of $44,279,469 which may be used to offset future capital gains. These losses will expire on December 31, 2017. In addition, the Fund incurred short-term capital losses of $233,195 after October 31, 2011, that it has elected to treat as arising in the following fiscal year.
During the year ended December 31, 2011, the Fund utilized net capital loss carryforwards of $9,265,882.
As of December 31, 2011, the Fund had temporary book/tax differences primarily attributable to wash sales on portfolio securities and permanent book/tax differences primarily attributable to Fund distributions and foreign currency transactions. To reflect reclassifications arising from the permanent differences, paid-in capital was charged $9,387,603, accumulated net realized loss was charged $2,777 and accumulated undistributed net investment income was credited $9,390,380. Net assets were not affected by this reclassification.
Note 5. Capital Stock
The Fund is authorized to issue 100 million shares of common stock at a par value of $0.001 per share.
During the year ended December 31, 2011, and December 31, 2010, the Fund issued no shares of common stock for the reinvestment of dividends.
On December 14, 2011, the Board of Directors approved the continuation of the delegation of its authority to management to effect repurchases, pursuant to management's discretion and subject to market conditions and investment considerations, of up to 10% of the Fund's common shares outstanding ("Share Repurchase Program") as of January 1, 2012 through the fiscal year ended December 31, 2012. During the year ended December 31, 2011, the Fund repurchased 3,794 Treasury shares of its common stock at an average price of $12.27 per share (including brokerage commissions) at a weighted average discount of 10.0%. These repurchases, which had a total cost of $46,538, resulted in an increase of less than $0.005 to the Fund's net asset value per share. During the year ended December 31, 2010, the Fund repurchased 95,802 Treasury shares of its common stock at an average price of $10.24 per share (including brokerage commissions) at a weighted average discount of 16.0%. These repurchases, which had a total cost of $981,439, resulted in an increase of $0.01 to the Fund's net asset value per share.
Note 6. Derivative Investments
The following tables present the value of derivatives held at December 31, 2011 and the effect of derivatives held during the year ended December 31, 2011, along with the respective location in the financial statements. The volume of activity for written options for the year ended December 31, 2011 is summarized in Note 3.
25
COHEN & STEERS DIVIDEND MAJORS FUND, INC.
NOTES TO FINANCIAL STATEMENTS(Continued)
Statement of Assets and Liabilities
|
|
|
|
Assets
|
|
Liabilities
|
|
Derivatives
|
|
Location
|
|
Fair Value
|
|
Location
|
|
Fair Value
|
|
Equity contracts
|
|
|
|
|
|
|
|
|
|
Payables
|
|
$
|
1,044,755
|
|
|
Statement of Operations
|
|
Derivatives
|
|
Location
|
|
Realized Gain
|
|
Change in
Unrealized
Depreciation
|
|
Equity contracts
|
|
Net Realized and Unrealized Gain (Loss)
|
|
$
|
2,059,055
|
|
|
$
|
(216,886
|
)
|
|
Note 7. Other
In the normal course of business, the Fund enters into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is dependent on claims that may be made against the Fund in the future and, therefore, cannot be estimated; however, based on experience, the risk of material loss from such claims is considered remote.
Note 8. New Accounting Pronouncement
In May 2011, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update No. 2011-04, "Fair Value Measurements and Disclosures (Topic 820)Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs" ("ASU 2011-04"). ASU 2011-04 clarifies the application of existing fair value measurement requirements, changes certain principles related to measuring fair value, and requires additional disclosures about fair value measurements.
Required disclosures are expanded under the new guidance, especially for fair value measurements that are categorized within Level 3 of the fair value hierarchy, for which quantitative information about the unobservable inputs used, and a narrative description of the valuation processes in place and sensitivity of recurring Level 3 measurements to changes in unobservable inputs will be required.
Management is currently evaluating the impact the adoption of this pronouncement will have on the Fund's financial statements. ASU 2011-04 is effective for fiscal years and interim periods beginning after December 15, 2011.
Note 9. Subsequent Events
Events and transactions occurring after December 31, 2011 and through the date that the financial statements were issued, have been evaluated in the preparation of the financial statements and no additional disclosure is required.
26
COHEN & STEERS DIVIDEND MAJORS FUND, INC.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of
Cohen & Steers Dividend Majors Fund, Inc.
In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Cohen & Steers Dividend Majors Fund, Inc. (the "Fund") at December 31, 2011, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2011 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
New York, New York
February 23, 2012
27
COHEN & STEERS DIVIDEND MAJORS FUND, INC.
AVERAGE ANNUAL TOTAL RETURNS
(periods ended December 31, 2011) (Unaudited)
Based on Net Asset Value
|
|
Based on Market Value
|
|
One Year
|
|
Five Years
|
|
Since Inception
(1/31/05)
|
|
One Year
|
|
Five Years
|
|
Since Inception
(1/31/05)
|
|
|
5.75
|
%
|
|
|
2.38
|
%
|
|
|
3.52
|
%
|
|
|
0.17
|
%
|
|
|
2.55
|
%
|
|
|
1.00
|
%
|
|
The performance data quoted represent past performance. Past performance is no guarantee of future results. The investment return will vary and the principal value of an investment will fluctuate and shares, if sold, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Current total returns of the Fund can be obtained by visiting our Web site at cohenandsteers.com.
TAX INFORMATION2011 (Unaudited)
Pursuant to the Jobs and Growth Relief Reconciliation Act of 2003, the Fund designates qualified dividend income of $2,015,332. Additionally, 15.6% of the ordinary dividends qualified for the dividends received deduction available to corporations.
REINVESTMENT PLAN
The Fund has a dividend reinvestment plan commonly referred to as an "opt-out" plan (the "Plan"). Each common shareholder who participates in the Plan will have all distributions of dividends and capital gains ("Dividends") automatically reinvested in additional common shares by Computershare as agent (the "Plan Agent"). Effective January 1, 2012, Computershare acquired certain lines of business from The Bank of New York Mellon, who acted as plan agent prior to such date. All terms and conditions of the Plan remain unchanged. Shareholders who elect not to participate in the Plan will receive all Dividends in cash paid by check mailed directly to the shareholder of record (or if the shares are held in street or other nominee name, then to the nominee) by the Plan Agent, as dividend disbursing agent. Shareholders whose common shares are held in the name of a broker or nominee should contact the broker or nominee to determine whether and how they may participate in the Plan.
The Plan Agent serves as agent for the shareholders in administering the Plan. After the Fund declares a Dividend, the Plan Agent will, as agent for the shareholders, either: (i) receive the cash payment and use it to buy common shares in the open market, on the NYSE or elsewhere, for the participants' accounts or (ii) distribute newly issued common shares of the Fund on behalf of the participants.
The Plan Agent will receive cash from the Fund with which to buy common shares in the open market if, on the Dividend payment date, the net asset value ("NAV") per share exceeds the market price per share plus estimated brokerage commissions on that date. The Plan Agent will receive the Dividend in newly issued common shares of the Fund if, on the Dividend payment date, the market price per share plus estimated brokerage commissions equals or exceeds the NAV per share of the Fund on that date. The number of shares to be issued will be computed at a per share rate equal to the greater of (i) the NAV or (ii) 95% of the closing market price per share on the payment date.
28
COHEN & STEERS DIVIDEND MAJORS FUND, INC.
If the market price per share is less than the NAV on a Dividend payment date, the Plan Agent will have until the last business day before the next ex-dividend date for the common stock, but in no event more than 30 days after the Dividend payment date (as the case may be, the "Purchase Period"), to invest the Dividend amount in shares acquired in open market purchases. If at the close of business on any day during the Purchase Period on which NAV is calculated the NAV equals or is less than the market price per share plus estimated brokerage commissions, the Plan Agent will cease making open market purchases and the uninvested portion of such Dividends shall be filled through the issuance of new shares of common stock from the Fund at the price set forth in the immediately preceding paragraph.
Participants in the Plan may withdraw from the Plan upon notice to the Plan Agent. Such withdrawal will be effective immediately if received not less than ten days prior to a Dividend record date; otherwise, it will be effective for all subsequent Dividends. If any participant elects to have the Plan Agent sell all or part of his or her shares and remit the proceeds, the Plan Agent is authorized to deduct a $15.00 fee plus $0.10 per share brokerage commissions.
The Plan Agent's fees for the handling of reinvestment of Dividends will be paid by the Fund. However, each participant will pay a pro rata share of brokerage commissions incurred with respect to the Plan Agent's open market purchases in connection with the reinvestment of Dividends. The automatic reinvestment of Dividends will not relieve participants of any income tax that may be payable or required to be withheld on such Dividends.
The Fund reserves the right to amend or terminate the Plan. All correspondence concerning the Plan should be directed to the Plan Agent at 800-432-8224.
OTHER INFORMATION
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available (i) without charge, upon request, by calling 800-330-7348, (ii) on our Web site at cohenandsteers.com or (iii) on the Securities and Exchange Commission's Web site at http://www.sec.gov. In addition, the Fund's proxy voting record for the most recent 12-month period ended June 30 is available by August 31 of each year (i) without charge, upon request, by calling 800-330-7348 or (ii) on the SEC's Web site at http://www.sec.gov.
The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Fund's Forms N-Q are available (i) without charge, upon request by calling 800-330-7348, or (ii) on the SEC's Web site at http://www.sec.gov. In addition, the Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 800-SEC-0330.
Please note that the distributions paid by the Fund to shareholders are subject to recharacterization for tax purposes and are taxable up to the amount of the Fund's investment company taxable income and net realized gains. Distributions in excess of the Fund's net investment company taxable income and realized gains are a return of capital distributed from the Fund's assets. To the extent this occurs, the Fund's shareholders of record will be notified of the estimated amount of capital returned to shareholders for each such distribution and this information will also be available at cohenandsteers.com. The final tax treatment of all distributions is reported to shareholders on their 1099-DIV forms, which are
29
COHEN & STEERS DIVIDEND MAJORS FUND, INC.
mailed after the close of each calendar year. Distributions of capital decrease the Fund's total assets and, therefore, could have the effect of increasing the Fund's expense ratio. In addition, in order to make these distributions, the Fund may have to sell portfolio securities at a less than opportune time.
Notice is hereby given in accordance with Rule 23c-1 under the Investment Company Act of 1940 that the Fund may purchase, from time to time, shares of its common stock in the open market.
Change to Investment Policy
The Board of Directors approved revisions to the ratings criteria for determining whether a security is deemed investment grade or below investment grade. The determination of whether a security is deemed investment grade or below investment grade will be determined at the time of investment. A security will be considered to be investment grade if it is rated as such by one nationally recognized statistical rating organization (NRSRO) (for example minimum Baa3 or BBB- by Moody's or S&P) or, if unrated, is judged to be investment grade by the investment manager.
30
COHEN & STEERS DIVIDEND MAJORS FUND, INC.
MANAGEMENT OF THE FUND
The business and affairs of the Fund are managed under the direction of the Board of Directors. The Board of Directors approves all significant agreements between the Fund and persons or companies furnishing services to it, including the Fund's agreements with its advisor, administrator, co-administrator, custodian and transfer agent. The management of the Fund's day-to-day operations is delegated to its officers, the advisor, administrator and co-administrator, subject always to the investment objective and policies of the Fund and to the general supervision of the Board of Directors.
The Board of Directors and officers of the Fund and their principal occupations during at least the past five years are set forth below. The statement of additional information (SAI) includes additional information about fund directors and is available, without charge, upon request by calling 800-330-7348.
Name, Address
1
and Age
|
|
Position(s) Held
with Fund
|
|
Term of
Office
2
|
|
Principal Occupation
During At Least
The Past 5 Years
(Including Other
Directorships Held)
|
|
Number of
Funds Within
Fund
Complex
Overseen by
Director
(Including
the Fund)
|
|
Length
of Time
Served
3
|
|
Interested Director
4
|
|
|
Robert H. Steers
Age: 58
|
|
Director and Co-Chairman
|
|
Until next election of directors
|
|
Co-Chairman and Co-Chief Executive Officer of Cohen & Steers Capital Management, Inc. (the Advisor) since 2003 and its parent, Cohen & Steers, Inc. since 2004. Vice President of Cohen & Steers Securities, LLC.
|
|
|
19
|
|
|
1991
to present
|
|
|
Martin Cohen
Age: 63
|
|
Director and Co-Chairman
|
|
Until next election of directors
|
|
Co-Chairman and Co-Chief Executive Officer of the Advisor since 2003 and Cohen & Steers, Inc. since 2004. Prior to that, President of the Advisor; Vice President of Cohen & Steers Securities, LLC.
|
|
|
19
|
|
|
1991
to present
|
|
|
Disinterested Directors
|
|
|
Michael G. Clark
Age: 46
|
|
Director
|
|
Until next election of directors
|
|
From May 2006 to June 2011, President and Chief Executive Officer of DWS Funds and Managing Director of Deutsche Asset Management.
|
|
|
19
|
|
|
June 2011 to present
|
|
|
(table continued on next page)
31
COHEN & STEERS DIVIDEND MAJORS FUND, INC.
(table continued from previous page)
Name, Address
1
and Age
|
|
Position(s) Held
with Fund
|
|
Term of
Office
2
|
|
Principal Occupation
During At Least
The Past 5 Years
(Including Other
Directorships Held)
|
|
Number of
Funds Within
Fund
Complex
Overseen by
Director
(Including
the Fund)
|
|
Length
of Time
Served
3
|
|
Bonnie Cohen
5
Age: 69
|
|
Director
|
|
Until next election of directors
|
|
Consultant. Board Member, United States Department of Defense Business Board since 2010; Advisory Board member, Posse Foundation since 2004; Trustee, H. Rubenstein Foundation since 1996; Trustee, District of Columbia Public Libraries since 2004; Board member Teluride Mountain Film Festival since 2010; Former Director, Reis, Inc. (real estate analytics firm) from 2003 to 2009; Former member of the Investment Committee, The Moriah Fund from 2002 to 2008; Former Board member, Foundation for Arts and Preservations in Embassies from 2001 to 2009; Former Under Secretary of State for Management, United States Department of State, 1996-2000.
|
|
|
19
|
|
|
2001
to present
|
|
|
George Grossman
Age: 58
|
|
Director
|
|
Until next election of directors
|
|
Attorney-at-law
|
|
|
19
|
|
|
1993
to present
|
|
|
Richard E. Kroon
Age: 69
|
|
Director
|
|
Until next election of directors
|
|
Member of Investment Committee, Monmouth University since 2004; Retired Chairman and Managing Partner of Sprout Group venture capital funds, then an affiliate of Donaldson, Lufkin and Jenrette Securities Corporation from 1981 to 2001. Former chairman of the National Venture Capital Association for the year 2000.
|
|
|
19
|
|
|
2004
to present
|
|
|
(table continued on next page)
32
COHEN & STEERS DIVIDEND MAJORS FUND, INC.
(table continued from previous page)
Name, Address
1
and Age
|
|
Position(s) Held
with Fund
|
|
Term of
Office
2
|
|
Principal Occupation
During At Least
The Past 5 Years
(Including Other
Directorships Held)
|
|
Number of
Funds Within
Fund
Complex
Overseen by
Director
(Including
the Fund)
|
|
Length
of Time
Served
3
|
|
Richard J. Norman
Age: 68
|
|
Director
|
|
Until next election of directors
|
|
Private Investor. Member, District of Columbia Department of Corrections Chaplains Corps from 2008 to February 2010; Member, Montgomery County, Maryland Department of Corrections Chaplains Corp since February 2010; Special Representative, Salvation Army World Service Organization (SAWSO) since 2010; Advisory Board Member, The Salvation Army since 1985; Financial Education Fund Chair, The Foundation Board of Maryland Public Television since 2009; Former President, Executive Committee, Chair of Investment Committee, The Foundation Board of Maryland Public Television from 1997 to 2008. Prior thereto, Investment Representative of Morgan Stanley Dean Witter from 1966 to 2000.
|
|
|
19
|
|
|
2001
to present
|
|
|
Frank K. Ross
Age: 68
|
|
Director
|
|
Until next election of directors
|
|
Visiting Professor of Accounting, Howard University School of Business since 2004; Board member and Audit Committee Chair and Human Resources and Compensation Committee Member, Pepco Holdings, Inc. (electric utility) since 2004. Formerly, Midatlantic Area Managing Partner for Assurance Services at KPMG LLP and Managing Partner of its Washington, DC offices from 1977 to 2003.
|
|
|
19
|
|
|
2004
to present
|
|
|
(table continued on next page)
33
COHEN & STEERS DIVIDEND MAJORS FUND, INC.
(table continued from previous page)
Name, Address
1
and Age
|
|
Position(s) Held
with Fund
|
|
Term of
Office
2
|
|
Principal Occupation
During At Least
The Past 5 Years
(Including Other
Directorships Held)
|
|
Number of
Funds Within
Fund
Complex
Overseen by
Director
(Including
the Fund)
|
|
Length
of Time
Served
3
|
|
Willard H. Smith Jr.
Age: 75
|
|
Director
|
|
6
|
|
Board member, Essex Property Trust, Inc. since 1996; Former Board member, Realty Income Corporation from 1996 to 2009; Former Board member, Highwoods Property Trust from 1996 to 2005; Former Board member, Crest Net Lease, Inc. from 1999 to 2009 Formerly, Managing Director at Merrill Lynch & Co., Equity Capital Markets Division, from 1983 to 1995.
|
|
|
19
|
|
|
1996
to present
|
|
|
C. Edward Ward Jr.
Age: 65
|
|
Director
|
|
Until next election of directors
|
|
Member of The Board of Trustees of Manhattan College, Riverdale, New York since 2004. Formerly Director of closed-end fund management for the New York Stock Exchange, where he worked from 1979 to 2004.
|
|
|
19
|
|
|
2004
to present
|
|
|
1
The address for each director is 280 Park Avenue, New York, NY 10017.
2
On March 12, 2008, the Board of Directors adopted a mandatory retirement policy stating a Director must retire from the Board on December 31st of the year in which he or she turns 75 years of age.
3
The length of time served represents the year in which the director was first elected or appointed to any fund in the Cohen & Steers fund complex.
4
"Interested person", as defined in the 1940 Act, of the fund because of affiliation with CSCM (Interested Directors).
5
Martin Cohen and Bonnie Cohen are not related.
6
Effective December 31, 2011, Willard H. Smith, Jr. retired from the Board of Directors in accordance with the mandatory retirement policy.
34
COHEN & STEERS DIVIDEND MAJORS FUND, INC.
The officers of the fund (other than Messrs. Cohen and Steers, whose biographies are provided above), their address, their ages and their principal occupations for at least the past five years are set forth below.
Name, Address and Age
1
|
|
Position(s) Held
with Fund
|
|
Principal Occupation During At Least the Past 5 Years
|
|
Length
of Time
Served
2
|
|
Adam M. Derechin
Age: 47
|
|
President and Chief Executive Officer
|
|
Chief Operating Officer of CSCM (since 2003) and CNS (since 2004). Prior to that, Senior Vice President of CSCM and Vice President and Assistant Treasurer of the Cohen & Steers funds.
|
|
Since 2005
|
|
|
Joseph M. Harvey
Age: 48
|
|
Vice President
|
|
President and Chief Investment Officer of CSCM (since 2003) and President of CNS (since 2004). Prior to that, Senior Vice President and Director of Investment Research of CSCM.
|
|
Since 2004
|
|
|
Richard E. Helm
Age: 52
|
|
Vice President
|
|
Senior Vice President of CSCM since 2005. Prior to that, VP and senior portfolio manager at WM Advisors, Inc.
|
|
Since 2005
|
|
|
Yigal Jhirad
Age: 47
|
|
Vice President
|
|
Senior Vice President of CSCM since 2007. Prior to that, executive director at Morgan Stanley and head of prime brokerage equity product marketing responsible for developing and marketing quantitative and derivatives product to hedge funds.
|
|
Since 2007
|
|
|
Francis C. Poli
Age: 49
|
|
Secretary
|
|
Executive Vice President, Secretary and General Counsel of CSCM and CNS since March 2007. Prior thereto, General Counsel of Allianz Global Investors of America LP.
|
|
Since 2007
|
|
|
James Giallanza
Age: 45
|
|
Treasurer and Chief Financial Officer
|
|
Senior Vice President of CSCM since September 2006. Prior thereto, Deputy Head of the US Funds Administration and Treasurer & CFO of various mutual funds within the Legg Mason (formally Citigroup Asset Management) fund complex from August 2004 to September 2006; Director/Controller of the US wholesale business at UBS Global Asset Management (U.S.) from September 2001 to July 2004.
|
|
Since 2006
|
|
|
Lisa D. Phelan
Age: 43
|
|
Chief Compliance Officer
|
|
Senior Vice President and Director of Compliance of CSCM since 2007 and prior to that, Vice President since 2006. Chief Compliance Officer of CSSL since 2004. Prior to that, Compliance Officer of CSCM since 2004. Chief Compliance Officer, Avatar Associates & Overture Asset Managers, 2003-2004.
|
|
Since 2006
|
|
|
1
The address of each officer is 280 Park Avenue, New York, NY 10017
2
Officers serve one-year terms. The length of time served represents the year in which the officer was first elected to that position in any fund in the Cohen & Steers fund complex. All of the officers listed above are officers of one or more of the other funds in the complex.
35
COHEN & STEERS DIVIDEND MAJORS FUND, INC.
Cohen & Steers Privacy Policy
Facts
|
|
What Does Cohen & Steers Do With Your Personal Information?
|
|
|
Why?
|
|
Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
|
|
|
What?
|
|
The types of personal information we collect and share depend on the product or service you have with us. This information can include:
• Social Security number and account balances
• Transaction history and account transactions
• Purchase history and wire transfer instructions
|
|
|
How?
|
|
All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons Cohen & Steers chooses to share; and whether you can limit this sharing.
|
|
|
Reasons we can share your personal information
|
|
Does Cohen & Steers
share?
|
|
Can you limit this
sharing?
|
|
For our everyday business purposes
such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or reports to credit bureaus
|
|
Yes
|
|
No
|
|
|
For our marketing purposes
to offer our products and services to you
|
|
Yes
|
|
No
|
|
|
For joint marketing with other financial companies
|
|
No
|
|
We don't share
|
|
|
For our affiliates' everyday business purposes
information about your transactions and experiences
|
|
No
|
|
We don't share
|
|
|
For our affiliates' everyday business purposes
information about your creditworthiness
|
|
No
|
|
We don't share
|
|
|
For our affiliates to market to you
|
|
No
|
|
We don't share
|
|
|
For non-affiliates to market to you
|
|
No
|
|
We don't share
|
|
|
Questions?
Call 800.330.7348
36
COHEN & STEERS DIVIDEND MAJORS FUND, INC.
Cohen & Steers Privacy Policy(Continued)
Who we are
|
|
|
|
Who is providing this notice?
|
|
Cohen & Steers Capital Management, Inc., Cohen & Steers Asia Limited, Cohen & Steers UK Limited, Cohen & Steers Europe SA, Cohen & Steers Securities, LLC, Cohen & Steers Private Funds, and Cohen & Steers Open and Closed-End Funds (collectively, "Cohen & Steers").
|
|
|
What we do
|
|
|
|
How does Cohen & Steers protect my personal information?
|
|
To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We restrict access to your information to those employees who need it to perform their jobs, and also require companies that provide services on our behalf to protect your information.
|
|
|
How does Cohen & Steers collect my personal information?
|
|
We collect your personal information, for example, when you
• Open an account or buy securities from us
• Provide account information or give us your contact information
• Make deposits or withdrawals from your account
We also collect your personal information from other companies.
|
|
|
Why can't I limit all sharing?
|
|
Federal law gives you the right to limit only
• sharing for affiliates' everyday business purposesinformation about your creditworthiness
• affiliates from using your information to market to you
• sharing for non-affiliates to market to you
State law and individual companies may give you additional rights to limit sharing.
|
|
|
Definitions
|
|
|
|
Affiliates
|
|
Companies related by common ownership or control. They can be financial and nonfinancial companies.
• Cohen & Steers does not share with affiliates.
|
|
|
Non-affiliates
|
|
Companies not related by common ownership or control. They can be financial and nonfinancial companies.
• Cohen & Steers does not share with non-affiliates so they can market to you.
|
|
|
Joint marketing
|
|
A formal agreement between nonaffiliated financial companies that together market financial products or services to you.
• Cohen & Steers does not jointly market.
|
|
|
37
COHEN & STEERS DIVIDEND MAJORS FUND, INC.
Cohen & Steers Investment Solutions
COHEN & STEERS GLOBAL REALTY SHARES
• Designed for investors seeking total return, investing primarily in global real estate equity securities
• Symbols: CSFAX, CSFBX*, CSFCX, CSSPX
COHEN & STEERS INSTITUTIONAL REALTY SHARES
• Designed for institutional investors seeking total return, investing primarily in REITs
• Symbol: CSRIX
COHEN & STEERS REALTY INCOME FUND
• Designed for investors seeking total return, investing primarily in real estate securities with an emphasis on both income and capital appreciation
• Symbols: CSEIX, CSBIX*, CSCIX, CSDIX
COHEN & STEERS INTERNATIONAL REALTY FUND
• Designed for investors seeking total return, investing primarily in international real estate securities
• Symbols: IRFAX, IRFCX, IRFIX
COHEN & STEERS
EMERGING MARKETS REAL ESTATE FUND
• Designed for investors seeking total return, investing primarily in emerging market real estate securities
• Symbols: APFAX, APFCX, APFIX
COHEN & STEERS REALTY SHARES
• Designed for investors seeking total return, investing primarily in REITs
• Symbol: CSRSX
COHEN & STEERS
INSTITUTIONAL GLOBAL REALTY SHARES
• Designed for institutional investors seeking total return, investing primarily in global real estate securities
• Symbol: GRSIX
COHEN & STEERS GLOBAL INFRASTRUCTURE FUND
• Designed for investors seeking total return, investing primarily in global infrastructure securities
• Symbols: CSUAX, CSUBX*, CSUCX, CSUIX
COHEN & STEERS DIVIDEND VALUE FUND
• Designed for investors seeking high current income and long-term growth of income and capital appreciation, investing primarily in dividend paying common stocks and preferred stocks
• Symbols: DVFAX, DVFCX, DVFIX
COHEN & STEERS
PREFERRED SECURITIES AND INCOME FUND
• Designed for investors seeking total return (high current income and capital appreciation), investing primarily in preferred and debt securities
• Symbols: CPXAX, CPXCX, CPXIX
COHEN & STEERS REAL ASSETS FUND
• Designed for investors seeking total return and the maximization of real returns during inflationary environments by investing primarily in real assets
• Symbols: RAPAX, RAPCX, RAPIX, RAPRX, RAPZX
Distributed by Cohen & Steers Securities, LLC.
COHEN & STEERS GLOBAL REALTY MAJORS ETF
• Designed for investors who seek a relatively low-cost "passive" approach for investing in a portfolio of real estate equity securities of companies in a specified index
• Symbol: GRI
Distributed by ALPS Distributors, Inc.
ISHARES COHEN & STEERS
REALTY MAJORS INDEX FUND
• Designed for investors who seek a relatively low-cost "passive" approach for investing in a portfolio of real estate equity securities of companies in a specified index
• Symbol: ICF
Distributed by SEI Investments Distribution Co.
* Class B shares are no longer offered except through dividend reinvestment and permitted exchanges by existing Class B shareholders.
Please consider the investment objectives, risks, charges and expenses of the fund carefully before investing. A prospectus containing this and other information can be obtained by calling 800-330-7348 or by visiting cohenandsteers.com. Please read the prospectus carefully before investing.
38
COHEN & STEERS DIVIDEND MAJORS FUND, INC.
OFFICERS AND DIRECTORS
Robert H. Steers
Director and co-chairman
Martin Cohen
Director and co-chairman
Michael G. Clark
Director
Bonnie Cohen
Director
George Grossman
Director
Richard E. Kroon
Director
Richard J. Norman
Director
Frank K. Ross
Director
Willard H. Smith Jr.
Director
C. Edward Ward, Jr.
Director
Adam M. Derechin
President and chief executive officer
Joseph M. Harvey
Vice president
Richard E. Helm
Vice president
Yigal D. Jhirad
Vice president
Francis C. Poli
Secretary
James Giallanza
Treasurer and chief financial officer
Lisa D. Phelan
Chief compliance officer
KEY INFORMATION
Investment Manager
Cohen & Steers Capital Management, Inc.
280 Park Avenue
New York, NY 10017
(212) 832-3232
Fund Co-administrator and Custodian
State Street Bank and Trust Company
One Lincoln Street
Boston, MA 02111
Transfer Agent
Computershare
480 Washington Boulevard
Jersey City, NJ 07310
(866) 227-0757
Legal Counsel
Ropes & Gray LLP
1211 Avenue of the Americas
New York, NY 10036
New York Stock Exchange Symbol: DVM
Web site: cohenandsteers.com
This report is for shareholder information. This is not a prospectus intended for use in the purchase or sale of Fund shares. Past performance is no guarantee of future results and your investment may be worth more or less at the time you sell.
39
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COHEN & STEERS
DIVIDEND MAJORS FUND
280 PARK AVENUE
NEW YORK, NY 10017
Annual Report
December 31, 2011
Cohen & Steers Dividend Majors Fund
DVMAR
Item 2. Code of Ethics.
The Registrant has adopted an Amended and Restated Code of Ethics that applies to its Principal Executive Officer and Principal Financial Officer. The Code of Ethics was in effect during the reporting period. The Registrant has not amended the Code of Ethics as described in Form N-CSR during the reporting period. The Registrant has not granted any waiver, including an implicit waiver, from a provision of the Code of Ethics as described in Form N-CSR during the reporting period. A current copy of the Code of Ethics is available on the Registrants website at cohenandsteers.com/downloads/code_of_ethics_exec_and_senior.pdf. Upon request, a copy of the Code of Ethics can be made by calling 800-330-7348 or writing to the Secretary of the Registrant, 280 Park Avenue, 10th floor, New York, NY 10017.
Item 3. Audit Committee Financial Expert.
The registrants board has determined that Michael G. Clark and Frank K. Ross, each a member of the boards Audit Committee, are each an audit committee financial expert. Mr. Clark and Mr. Ross are each independent, as such term is defined in Form N-CSR.
Item 4. Principal Accountant Fees and Services.
(a) (d) Aggregate fees billed to the registrant for the last two fiscal years for professional services rendered by the registrants principal accountant were as follows:
|
|
2011
|
|
2010
|
|
Audit Fees
|
|
$
|
47,000
|
|
$
|
47,000
|
|
Audit-Related Fees
|
|
$
|
0
|
|
$
|
0
|
|
Tax Fees
|
|
$
|
6,000
|
|
$
|
6,000
|
|
All Other Fees
|
|
$
|
0
|
|
$
|
0
|
|
Tax fees were billed in connection with the preparation of tax returns, calculation and designation of dividends and other miscellaneous tax services.
(e)(1)
The registrants audit committee is required to pre-approve audit and non-audit services performed for the registrant by the principal accountant. The audit committee also is required to pre-approve non-audit services performed by the registrants principal accountant for the registrants investment advisor (not including any sub-advisor whose role is primarily portfolio management and is subcontracted with or overseen by another investment advisor) and/or to any entity controlling, controlled by or under common control with the registrants investment advisor that provides ongoing services to the registrant, if the engagement for services relates directly to the operations and financial reporting of the registrant.
The audit committee may delegate pre-approval authority to one or more of its members who are independent members of the board of directors of the registrant. The member or members to whom such authority is delegated shall report any pre-approval decisions to the audit committee at its next scheduled meeting. The audit committee may not delegate its responsibility to pre-
approve services to be performed by the registrants principal accountant to the investment advisor.
(e) (2)
No services included in (b) (d) above were approved by the audit committee pursuant to paragraphs (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f)
Not applicable.
(g)
For the fiscal years ended December 31, 2011 and December 31, 2010, the aggregate fees billed by the registrants principal accountant for non-audit services rendered to the registrant and for non-audit services rendered to the registrants investment advisor (not including any sub-advisor whose role is primarily portfolio management and is subcontracted with or overseen by another investment advisor) and/or to any entity controlling, controlled by or under common control with the registrants investment advisor that provides ongoing services to the registrant were:
|
|
2011
|
|
2010
|
|
Registrant
|
|
$
|
6,000
|
|
$
|
6,000
|
|
Investment Advisor
|
|
$
|
20,000
|
|
$
|
20,000
|
|
(h)
The registrants audit committee considered whether the provision of non-audit services that were rendered to the registrants investment advisor (not including any sub-advisor whose role is primarily portfolio management and is subcontracted with or overseen by another investment advisor) and/or to any entity controlling, controlled by or under common control with the registrants investment advisor that provides ongoing services to the registrant that were not required to be pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X was compatible with maintaining the principal accountants independence.
Item 5. Audit Committee of Listed Registrants.
The registrant has a separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934. The members of the committee are Frank K. Ross (chairman), Bonnie Cohen, George Grossman and Richard E. Kroon.
Item 6. Schedule of Investments.
Included in Item 1 above.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
The registrant has delegated voting of proxies in respect of portfolio holdings to Cohen & Steers Capital Management, Inc., in accordance with the policies and procedures set forth below.
COHEN & STEERS CAPITAL MANAGEMENT, INC.
STATEMENT OF POLICIES AND PROCEDURES REGARDING THE VOTING OF SECURITIES
This statement sets forth the policies and procedures that Cohen & Steers Capital Management, Inc. (the Advisor) follows in exercising voting rights with respect to securities held in our client portfolios. All proxy-voting rights that are exercised by the Advisor shall be subject to this Statement of Policy and Procedures.
I.
Objectives
Voting rights are an important component of corporate governance. The Advisor has three overall objectives in exercising voting rights:
A. Responsibility. The Advisor shall seek to ensure that there is an effective means in place to hold companies accountable for their actions. While management must be accountable to its board, the board must be accountable to a companys shareholders. Although accountability can be promoted in a variety of ways, protecting shareholder voting rights may be among our most important tools.
B. Rationalizing Management and Shareholder Concerns. The Advisor seeks to ensure that the interests of a companys management and board are aligned with those of the companys shareholders. In this respect, compensation must be structured to reward the creation of shareholder value.
C. Shareholder Communication. Since companies are owned by their shareholders, the Advisor seeks to ensure that management effectively communicates with its owners about the companys business operations and financial performance. It is only with effective communication that shareholders will be able to assess the performance of management and to make informed decisions on when to buy, sell or hold a companys securities.
In exercising voting rights, the Advisor follows the general principles set forth below.
·
The ability to exercise a voting right with respect to a security is a valuable right and, therefore, must be viewed as part of the asset itself.
·
In exercising voting rights, the Advisor shall engage in a careful evaluation of issues that may materially affect the rights of shareholders and the value of the security.
·
Consistent with general fiduciary principles, the exercise of voting rights shall always be conducted with reasonable care, prudence and diligence.
·
In exercising voting rights on behalf of clients, the Advisor shall conduct itself in the same manner as if the Advisor was the constructive owner of the securities.
·
To the extent reasonably possible, the Advisor shall participate in each shareholder voting opportunity.
·
Voting rights shall not automatically be exercised in favor of management-supported proposals.
·
The Advisor, and its officers and employees, shall never accept any item of value in consideration of a favorable proxy voting decision.
Set forth below are general guidelines followed in exercising proxy voting rights:
Prudence
. In making a proxy voting decision, the Advisor shall give appropriate consideration to all relevant facts and circumstances, including the value of the securities to be voted and the likely effect any vote may have on that value. Since voting rights must be exercised on the basis of an informed judgment, investigation shall be a critical initial step.
Third Party Views
. While the Advisor may consider the views of third parties, the Advisor shall never base a proxy voting decision solely on the opinion of a third party.
Rather, decisions shall be based on a reasonable and good faith determination as to how best to maximize shareholder value.
Shareholder Value.
Just as the decision whether to purchase or sell a security is a matter of judgment, determining whether a specific proxy resolution will increase the market value of a security is a matter of judgment as to which informed parties may differ. In determining how a proxy vote may affect the economic value of a security, the Advisor shall consider both short-term and long-term views about a companys business and prospects, especially in light of our projected holding period on the stock (e.g., the Advisor may discount long-term views on a short-term holding).
Set forth below are guidelines as to how specific proxy voting issues shall be analyzed and assessed.
While these guidelines will provide a framework for the Advisor decision making process, the mechanical application of these guidelines can never address all proxy voting decisions.
When new issues arise or old issues present nuances not encountered before, the Advisor must be guided by its reasonable judgment to vote in a manner that the Advisor deems to be in the best interests of the Fund and its shareholders. In addition, because the regulatory framework and the business cultures and practices vary from region to region, the below general guidelines may be inconsistent in certain circumstances for proxies of issuers of securities in Europe and Asia..
Uncontested Director Elections
Votes on director nominees should be made on a case-by-case basis using a mosaic approach, where all factors are considered in director elections and where no single issue is deemed to be determinative.
For example, a nominees experience and business judgment may be critical to the long-term success of the portfolio company, notwithstanding the fact that he or she may serve on the board of more than four public companies. In evaluating nominees, the Advisor considers the following factors:
·
Whether the nominee attended less than 75 percent of the board and committee meetings without a valid excuse for the absences;
·
Whether the nominee is an inside or affiliated outside director and sits on the audit, compensation, or nominating committees;
·
Whether the nominee ignored a significant shareholder proposal that was approved by a (i) majority of the shares outstanding or (ii) majority of the votes cast for two consecutive years;
·
Whether the nominee, without shareholder approval, to our knowledge instituted a new poison pill plan, extended an existing plan, or adopted a new plan upon the expiration of an existing plan during the past year;
·
Whether the nominee is an inside or affiliated outside director and the full board serves as the audit, compensation, or nominating committee or the company does not have one of these committees;
·
Whether the nominee is an insider or affiliated outsider on boards that are not at least majority independent;
·
Whether the nominee is the CEO of a publicly-traded company who serves on more than two public boards;
·
Whether the nominee serves on more than four public company boards;
·
Whether the nominee serves on the audit committee where there is evidence (such as audit reports or reports mandated under the Sarbanes Oxley Act) that there exists material weaknesses in the companys internal controls;
·
Whether the nominee serves on the compensation committee if that director was present at the time of the grant of backdated options or options the pricing or the timing of which Advisor believes may have been manipulated to provide additional benefits to executives;
·
Whether the nominee is believed by us to have a material conflict of interest with the portfolio company; and
·
Whether the nominee (or the overall board) in our view has a record of making poor corporate or strategic decisions or has demonstrated an overall lack of good business judgment.
The Advisor votes on a case-by-case basis for shareholder proposals requesting companies to amend their bylaws in order to create access to the proxy so as to nominate candidates for directors. The Advisor recognizes the importance of shareholder access to the ballot process as a means to ensure that boards do
not become self-perpetuating and self-serving. However, the Advisor is also aware that some proposals may promote certain interest groups and could be disruptive to the nomination process. Special attention will be paid to companies that display a chronic lack of shareholder accountability.
Proxy Contests
Director Nominees in a Contested Election
. By definition, this type of board candidate or slate runs for the purpose of seeking a significant change in corporate policy or control. Therefore, the economic impact of the vote in favor of or in opposition to that director or slate must be analyzed using a higher standard such as is normally applied to changes in control. Criteria for evaluating director nominees as a group or individually should also include: the underlying reason why the new slate (or individual director) is being proposed; performance; compensation; corporate governance provisions and takeover activity; criminal activity; attendance at meetings; investment in the company; interlocking directorships; inside, outside and independent directors; number of other board seats; and other experience. It is impossible to have a general policy regarding director nominees in a contested election.
Reimbursement of Proxy Solicitation Expenses
. Decisions to provide full reimbursement for dissidents waging a proxy contest should be made on a case-by-case basis.
Ratification of Auditors
The Advisor votes for proposals to ratify auditors, unless an auditor has a financial interest in or association with the company, and are therefore not independent; or there is reason to believe that the independent auditor has rendered an opinion that is neither accurate nor indicative of the companys financial position. Generally, the Advisor votes against auditor ratification and withhold votes from audit committee members if non-audit fees exceed audit fees. The Advisor votes on a case-by-case basis on auditor rotation proposals. Criteria for evaluating the rotation proposal include, but are not limited to: tenure of the audit firm; establishment and disclosure of a renewal process whereby the auditor is regularly evaluated for both audit quality and competitive price; length of the rotation period advocated in the proposal; and any significant audit related issues. Generally, the Advisor votes against auditor indemnification and limitation of liability; however the Advisor recognizes there may be situations where indemnification and limitations on liability may be appropriate.
Takeover Defenses
While the Advisor recognizes that a takeover attempt can be a significant distraction for the board and management to deal with, the simple fact is that the possibility of a corporate takeover keeps management focused on maximizing shareholder value. As a result, the Advisor opposes measures that are designed to prevent or obstruct corporate takeovers because they can entrench current management. The following are our guidelines on change of control issues:
Shareholder Rights Plans
. The Advisor acknowledges that there are arguments for and against shareholder rights plans, also known as poison pills. Companies should put their case for rights plans to shareholders. The Advisor reviews on a case-by-case basis management proposals to ratify a poison pill. The Advisor generally looks for shareholder friendly features including a two- to three-year sunset provision, a permitted bid provision and a 20 percent or higher flip-in provision.
Greenmail
. The Advisor votes for proposals to adopt anti-greenmail charter or bylaw amendments or otherwise restrict a companys ability to make greenmail payments.
Unequal Voting Rights
. Generally, The Advisor votes against dual-class recapitalizations as they offer an effective way for a firm to thwart hostile takeovers by concentrating voting power in the hands of management or other insiders.
Classified Boards
. The Advisor generally votes in favor of shareholder proposals to declassify a board of directors, although the Advisor acknowledges that a classified board may be in the long-term best interests of a company in certain situations. In voting on shareholder proposals to declassify a board of directors, the Advisor evaluates all facts and circumstances surrounding such proposal, including whether the shareholder proposing the de-classification has an agenda in making such proposal that may be at odds with the long-term best interests of the company or whether it would be in the best interests of the company to thwart a shareholders attempt to control the board of directors.
Cumulative Voting
. Having the ability to cumulate our votes for the election of directorsthat is, cast more than one vote for a director about whom they feel stronglygenerally increases shareholders rights to effect change in the management of a corporation. The Advisor generally supports, therefore, proposals to adopt cumulative voting.
Shareholder Ability to Call Special Meeting
. The Advisor votes on a case-by-case basis for shareholder proposals requesting companies to amend their governance documents (bylaws and/or charter) in order to allow shareholders to call special meetings. The Advisor recognizes the importance on shareholder ability to call a special meeting, however, the Advisor is also aware that some proposals are put forth in order to promote the agenda(s) of certain special interest groups and could be disruptive to the management of the company.
Shareholder Ability to Act by Written Consent
. The Advisor generally votes against proposals to allow or facilitate shareholder action by written consent. The requirement that all shareholders be given notice of a shareholders meeting and matters to be discussed therein seems to provide a reasonable protection of minority shareholder rights.
Shareholder Ability to Alter the Size of the Board
. The Advisor generally votes for proposals that seek to fix the size of the board and vote against proposals that give management the ability to alter the size of the board without shareholder approval. While the Advisor recognizes the importance of such proposals, the Advisor is however also aware that these proposals are sometimes put forth in order to promote the agenda(s) of certain special interest groups and could be disruptive to the management of the company.
Miscellaneous Board Provisions
Board Committees
. Boards should delegate key oversight functions, such as responsibility for audit, nominating and compensation issues, to independent committees. The chairman and members of any committee should be clearly identified in the annual report. Any committee should have the authority to engage independent advisors where appropriate at the companys expense.
Audit, nominating and compensation committees should consist solely of non-employee directors, who are independent of management.
Separate Chairman and CEO Positions
. The Advisor will generally vote for proposals looking to separate the CEO and Chairman roles. The Advisor does acknowledge, however, that under certain circumstances, it may be reasonable for the CEO and Chairman roles to be held by a single person.
Lead Directors and Executive Sessions
. In cases where the CEO and Chairman roles are combined, Advisor will vote for the appointment of a lead (non-insider) director and for regular executive sessions (board meetings taking place without the CEO/Chairman present).
Majority of Independent Directors
. The Advisor votes for proposals that call for the board to be composed of a majority of independent directors. The Advisor believes that a majority of independent directors can be an important factor in facilitating objective decision making and enhancing accountability to shareholders.
Independent Committees
. The Advisor votes for shareholder proposals requesting that the boards audit, compensation, and nominating committees consist exclusively of independent directors.
Stock Ownership Requirements
. The Advisor supports measures requiring senior executives to hold a minimum amount of stock in a company (often expressed as a percentage of annual compensation), requiring stock acquired through option exercise to be held for a certain minimum amount of time and issuing restricted stock awards instead of options.
Term of Office
. The Advisor votes against shareholder proposals to limit the tenure of outside directors. Term limits pose artificial and arbitrary impositions on the board and could harm shareholder interests by forcing experienced and knowledgeable directors off the board.
Director and Officer Indemnification and Liability Protection
. Proposals concerning director and officer indemnification and liability protection should be evaluated on a case-by-case basis.
Board Size
. The Advisor generally votes for proposals to limit the size of the board to 15 members or less.
Majority Vote Standard
. The Advisor generally votes for proposals asking for the board to initiate the appropriate process to amend the companys governance documents (charter or bylaws) to provide that director nominees shall be elected by the affirmative vote of the majority of votes cast at an annual meeting of shareholders. The Advisor would generally review on a case-by-case basis proposals that address alternative approaches to a majority vote requirement.
Confidential Voting
. The Advisor votes for shareholder proposals requesting that companies adopt confidential voting, use independent tabulators, and use independent inspectors of election as long as the proposals include clauses for proxy contests as follows: in the case of a contested election, management should be permitted to request that the dissident group honor its confidential voting policy. If the dissidents agree, the policy remains in place. If the dissidents do not agree, the confidential voting policy is waived.
The Advisor also votes for management proposals to adopt confidential voting.
Bundled Proposals
. The Advisor reviews on a case-by-case basis bundled or conditioned proxy proposals. In the case of items that are conditioned upon each other, the Advisor examines the benefits and costs of the packaged items. In instances where the joint effect of the conditioned items is not in shareholders best interests, the Advisor votes against the proposals. If the combined effect is positive, the Advisor supports such proposals.
Date/Location of Meeting
. The Advisor votes against shareholder proposals to change the date or location of the shareholders meeting. No one site will meet the needs of all shareholders.
Adjourn Meeting if Votes are Insufficient
. Open-end requests for adjournment of a shareholder meeting generally will not be supported. However, where management specifically states the reason for requesting an adjournment and the requested adjournment is necessary to permit a proposal that would otherwise be supported under this policy to be carried out; the adjournment request will be supported.
Disclosure of Shareholder Proponents
. The Advisor votes for shareholder proposals requesting that companies disclose the names of shareholder proponents. Shareholders may wish to contact the proponents of a shareholder proposal for additional information.
Capital Structure
Increase Additional Common Stock
. The Advisor generally votes for increases in authorized shares, provided that the increase is not greater than three times the number of shares outstanding and reserved for issuance (including shares reserved for stock-related plans and securities convertible into common stock, but not shares reserved for any poison pill plan). Votes generally are cast in favor of proposals to authorize additional shares of stock except where the proposal:
·
creates a blank check preferred stock; or
·
establishes classes of stock with superior voting rights.
Blank Check Preferred Stock
. Votes generally are cast in opposition to management proposals authorizing the creation of new classes of preferred stock with unspecific voting, conversion, distribution and other rights, and management proposals to increase the number of authorized blank check preferred shares. The Advisor may vote in favor of this type of proposal when it receives assurances to its reasonable satisfaction that (i) the preferred stock was authorized by the board for the use of legitimate capital formation purposes and not for anti- takeover purposes, and (ii) no preferred stock will be issued with voting power that is disproportionate to the economic interests of the preferred stock. These representations should be made either in the proxy statement or in a separate letter from the company to the Advisor.
Preemptive Rights
. Votes regarding shareholder proposals seeking preemptive rights are determined on a case-by-case basis after evaluating:
·
The size of the company;
·
The shareholder base; and
·
The liquidity of the stock.
For example, it would be difficult to support a shareholder proposal that would require an S&P 500 company with over $1 billion in equity held by thousands of shareholders (with no single shareholder owning a significant percentage of outstanding shares) to implement preemptive rights each time it conducted a new offering. Such a requirement would be impractical and extremely costly. Moreover, at companies with that large of a shareholder base and the ease with which shareholders could preserve their relative interest through purchases of shares on the on the open market, the cost of implementing preemptive rights does not seem justifiable in relation to the benefits.
Dual Class Capitalizations
. Because classes of common stock with unequal voting rights limit the rights of certain shareholders, the Advisor votes against adoption of a dual or multiple class capitalization structure.
Restructurings/Recapitalizations
. The Advisor reviews proposals to increase common and/or preferred shares and to issue shares as part of a debt restructuring plan on a case- by-case basis.
In voting, the Advisor considers the following issues:
·
dilutionhow much will ownership interest of existing shareholders be reduced, and how extreme will dilution to any future earnings be?
·
change in controlwill the transaction result in a change in control of the company?
·
bankruptcygenerally, approve proposals that facilitate debt restructurings unless there are clear signs of self-dealing or other abuses.
Share Repurchase Programs
. Boards may institute share repurchase or stock buy-back programs for a number of reasons. The Advisor will generally vote in favor of such programs where the repurchase would be in the long-term best interests of shareholders, and where the company is not thought to be able to use the cash in a more useful way.
The Advisor will vote against such programs when shareholders interests could be better served by deployment of the cash for alternative uses, or where the repurchase is a defensive maneuver or an attempt to entrench management.
Targeted Share Placements
. These shareholder proposals ask companies to seek stockholder approval before placing 10% or more of their voting stock with a single investor. The proposals are typically in reaction to the placement by various companies of a large block of their voting stock in an ESOP, parent capital fund or with a single friendly investor, with the aim of protecting themselves against a hostile tender offer. These proposals are voted on a case-by-case basis after reviewing the individual situation of the company receiving the proposal.
Executive and Director Compensation
Stock-based Incentive Plans
. Votes with respect to compensation plans should be determined on a case-by-case basis. The analysis of compensation plans focuses primarily on the transfer of shareholder wealth (the dollar cost of pay plans to shareholders). Other matters included in our analysis are the amount of the companys outstanding stock to be reserved for the award of stock options or restricted stock, whether the exercise price of an option is less than the stocks fair market value at the date of the grant of the options, and whether the plan provides for the exchange of outstanding options for new ones at lower exercise prices. Every award type is valued. An estimated dollar cost for the proposed plan and all continuing plans is derived. This cost, dilution to shareholders equity, will also be expressed as a percentage figure for the transfer of shareholder wealth and will be considered along with dilution to voting power. Once the cost of the plan is estimated, it is compared to an allowable industry-specific and market cap-based dilution cap.
If the proposed plan cost is above the allowable cap, an against vote is indicated. If the proposed cost is below the allowable cap, a vote for the plan is indicated unless the plan violates the repricing guidelines. If the company has a history of repricing options or has the express ability to reprice underwater stock options without first securing shareholder approval under the proposed plan, the plan receives an against voteeven in cases where the plan cost is considered acceptable based on the quantitative analysis.
The Advisor votes against equity plans that have high average three year burn rates, unless the company has publicly committed to reduce the burn rate to a rate that is comparable to its peer group (as determined by the Advisor).
Approval of Cash or Cash-and-Stock Bonus Plans
. The Advisor votes for cash or cash-and-stock bonus plans to exempt the compensation from limits on deductibility under the provisions of Section 162(m) of the Internal Revenue Code of 1986, as amended (the Code).
Executive Compensation
. Executive compensation should be tied to the performance of the executive and the company as well as relevant market conditions. The Advisor feels that the performance criteria and specific amounts and types of executive compensation are best decided by a companys board of directors and/or its compensation committee and fully disclosed to shareholders.
The Advisor will, however, vote for shareholder proposals that call for shareholders to vote, in a non-binding manner, on executive pay since such vote is non-binding and is merely informative for the board of directors and/or compensation committee. Further, the Advisor generally votes for shareholder proposals that seek additional disclosure of executive and director pay information.
Reload/Evergreen Features
. The Advisor will generally vote against plans that enable the issuance of reload options and that provide an automatic share replenishment (evergreen) feature.
Golden Parachutes
. The Advisor opposes the use of accelerated employment contracts that result in cash grants of greater than three times annual compensation (salary and bonus) in the event of termination of employment following a change in control of a company. In general, the guidelines call for voting against golden parachute plans because they impede potential takeovers that shareholders should be free to consider. The Advisor generally withholds its votes at the next shareholder meeting for directors who to our knowledge approved golden parachutes.
401(k) Employee Benefit Plans
. The Advisor votes for proposals to implement a 401(k) savings plan for employees.
Employee Stock Purchase Plans
. The Advisor supports employee stock purchase plans, although the Advisor generally believes the discounted purchase price should be at least 85% of the current market price.
Option Expensing
. The Advisor votes for shareholder proposals to expense fixed-price options.
Vesting
. The Advisor believes that restricted stock awards normally should vest over at least a two-year period.
Option Repricing
. Stock options generally should not be re-priced, and never should be re-priced without shareholder approval. In addition, companies should not issue new options, with a lower strike price, to make up for previously issued options that are substantially underwater. The Advisor will vote against the election of any slate of directors that, to its knowledge, has authorized a company to re-price or replace underwater options during the most recent year without shareholder approval.
Stock Holding Periods
. Generally vote against all proposals requiring executives to hold the stock received upon option exercise for a specific period of time.
Transferable Stock Options
. Review on a case-by-case basis proposals to grant transferable stock options or otherwise permit the transfer of outstanding stock options, including cost of proposal and alignment with shareholder interests.
Recoup Bonuses
. The Advisor votes on a case-by-case on shareholder proposals to recoup unearned incentive bonuses or other incentive payments made to senior executives if it is later determined that fraud, misconduct, or negligence significantly contributed to a restatement of financial results that led to the awarding of unearned incentive compensation.
Incorporation
Reincorporation Outside of the United States
. Generally, the Advisor will vote against companies looking to reincorporate outside of the U.S.
Voting on State Takeover Statutes
. The Advisor reviews on a case-by-case basis proposals to opt in or out of state takeover statutes (including control share acquisition statutes, control share cash-out statutes, freeze out provisions, fair price provisions, stakeholder laws, poison pill endorsements, severance pay and labor contract provisions, anti greenmail provisions, and disgorgement provisions). In voting on these shareholder proposals, the Advisor evaluates all facts and circumstances surrounding such proposal, including whether the shareholder proposing such measure has an agenda in making such proposal that may be at odds with the longterm best interests of the company or whether it would be in the best interests of the company to thwart a shareholders attempt to control the board of directors.
Voting on Reincorporation Proposals
. Proposals to change a companys state of incorporation are examined on a case-by-case basis. In making our decision, the Advisor reviews managements rationale for the proposal, changes to the charter/bylaws, and differences in the state laws governing the companies.
Mergers and Corporate Restructurings
Mergers and Acquisitions
. Votes on mergers and acquisitions should be considered on a case-by-case basis, taking into account factors including the following: anticipated financial and operating benefits; offer price (cost vs. premium); prospects of the combined companies; how the deal was negotiated; and changes in corporate governance and their impact on shareholder rights.
The Advisor votes against proposals that require a super-majority of shareholders to approve a merger or other significant business combination. The Advisor supports proposals that seek to lower super-majority voting requirements.
Nonfinancial Effects of a Merger or Acquisition
. Some companies have proposed a charter provision which specifies that the board of directors may examine the nonfinancial effect of a merger or acquisition on the company. This provision would allow the board to evaluate the impact a proposed change in control would have on employees, host communities, suppliers and/or others. The Advisor generally votes against proposals to adopt such charter provisions. The Advisor feels it is the directors fiduciary duty to base decisions solely on the financial interests of the shareholders.
Corporate Restructuring
. Votes on corporate restructuring proposals, including minority squeeze outs, leveraged buyouts, going private proposals, spin-offs, liquidations, and asset sales, should be considered on a case-by-case basis.
Spin-offs
. Votes on spin-offs should be considered on a case-by-case basis depending on the tax and regulatory advantages, planned use of sale proceeds, market focus, and managerial incentives.
Asset Sales
. Votes on asset sales should be made on a case-by-case basis after considering the impact on the balance sheet/working capital, value received for the asset, and potential elimination of diseconomies.
Liquidations
. Votes on liquidations should be made on a case-by-case basis after reviewing managements efforts to pursue other alternatives, appraisal value of assets, and the compensation plan for executives managing the liquidation.
Appraisal Rights
. The Advisor votes for proposals to restore, or provide shareholders with, rights of appraisal. Rights of appraisal provide shareholders who are not satisfied with the terms of certain corporate transactions the right to demand a judicial review in order to determine a fair value for their shares.
Changing Corporate Name
. The Advisor votes for changing the corporate name.
Social Issues.
The Advisor believes that it is the responsibility of the board and management to run a company on a daily basis. With this in mind, in the absence of unusual circumstances, the Advisor does not believe that shareholders should be involved in determining how a company should address broad social and policy issues. As a result, the Advisor generally votes against these types of proposals, which are generally initiated by shareholders, unless the Advisor believes the proposal has significant economic implications.
Item 8. Portfolio Managers of Closed-End Investment Companies.
Information pertaining to the portfolio managers of the registrant, as of December 31, 2011, is set forth below.
Martin Cohen
·
Director and co-chairman
·
Portfolio manager since inception
|
|
Co-founder, co-chairman and co-chief executive officer of Cohen & Steers Capital Management, Inc. (C&S) and its parent company, Cohen & Steers, Inc. (CNS). Vice president and director of Cohen & Steers Securities, LLC. Director and co-chairman of each of the Cohen & Steers funds. Previously, president of C&S and each of the Cohen & Steers funds.
|
|
|
|
Robert Steers
·
Director and co-chairman
·
Portfolio manager since inception
|
|
Co-founder, co-chairman and co-chief executive officer of C&S and CNS. Vice President and Director of Cohen & Steers Securities, LLC. Director and co-chairman of each of the Cohen & Steers funds. Previously, chairman of C&S and each of the Cohen & Steers funds.
|
|
|
|
Joseph Harvey
|
|
President of C&S and CNS. Previously, senior vice president of C&S and director of research.
|
·
Vice president
·
Portfolio manager since inception
|
|
|
|
|
|
Richard Helm
·
Vice President
·
Portfolio manager since 2005
|
|
Senior vice president of C&S. Previously, senior portfolio manager of WM Advisors, Inc.
|
|
|
|
William F. Scapell
·
Vice President
·
Portfolio manager since 2005
|
|
Senior vice president of C&S. Previously, chief strategist for preferred securities at Merrill Lynch & Co.
|
C&S utilizes a team-based approach in managing the registrant. Mr. Cohen and Mr. Steers are the leaders of this team and they act in a supervisory capacity. Mr. Harvey, Mr. Scapell and Mr. Helm direct and supervise the execution of the registrants investment strategy, and lead and guide the other members of the team.
Each portfolio manager listed above manages other investment companies and/or investment vehicles and accounts in addition to the registrant. The following tables show, as of December 31, 2011, the number of accounts each portfolio manager managed in each of the listed categories and the total assets in the accounts managed within each category. One (1) of the 19 other accounts managed by Mr. Helm with total assets of 67.817 million is subject to performance-based fees. Two (2) of the 42 other accounts managed by Messrs. Cohen, Steers and Harvey, with total assets of $105.89 million, are subject to performance-based fees.
Martin Cohen
|
|
Number of accounts
|
|
Total assets
|
|
|
|
|
|
|
|
·
Registered investment companies
|
|
16
|
|
$
|
15,439,761,000
|
|
|
|
|
|
|
|
·
Other pooled investment vehicles
|
|
38
|
|
$
|
16,668,923,000
|
|
|
|
|
|
|
|
·
Other accounts
|
|
39
|
|
$
|
4,275,709,000
|
|
Robert Steers
|
|
Number of accounts
|
|
Total assets
|
|
|
|
|
|
|
|
·
Registered investment companies
|
|
16
|
|
$
|
15,439,761,000
|
|
|
|
|
|
|
|
|
·
Other pooled investment vehicles
|
|
38
|
|
$
|
16,668,923,000
|
|
|
|
|
|
|
|
|
·
Other accounts
|
|
39
|
|
$
|
4,275,709,000
|
|
Joseph Harvey
|
|
Number of accounts
|
|
Total assets
|
|
|
|
|
|
|
|
·
Registered investment companies
|
|
16
|
|
$
|
15,439,761,000
|
|
|
|
|
|
|
|
·
Other pooled investment vehicles
|
|
38
|
|
$
|
16,668,923,000
|
|
|
|
|
|
|
|
·
Other accounts
|
|
39
|
|
$
|
4,275,709,000
|
|
Richard Helm
|
|
Number of accounts
|
|
Total assets
|
|
|
|
|
|
|
|
·
Registered investment companies
|
|
6
|
|
$
|
2,353,933,000
|
|
|
|
|
|
|
|
·
Other pooled investment vehicles
|
|
5
|
|
$
|
922,290,000
|
|
|
|
|
|
|
|
·
Other accounts
|
|
17
|
|
$
|
725,710,000
|
|
William F. Scapell
|
|
Number of accounts
|
|
Total assets
|
|
|
|
|
|
|
|
·
Registered investment companies
|
|
7
|
|
$
|
6,460,047,000
|
|
|
|
|
|
|
|
·
Other pooled investment vehicles
|
|
2
|
|
$
|
7,340,002,000
|
|
|
|
|
|
|
|
·
Other accounts
|
|
5
|
|
$
|
522,559,000
|
|
Share Ownership.
The following table indicates the dollar range of securities of the registrant owned by the registrants portfolio managers as of December 31, 2011
|
|
Dollar Range of Securities Owned
|
|
Martin Cohen
|
|
$500,001 $1,000,000
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|
Robert Steers
|
|
$100,001 - $500,000
|
|
Joseph Harvey
|
|
None
|
|
Richard Helm
|
|
None
|
|
William F. Scapell
|
|
$1 - $10,000
|
|
Conflicts of Interest.
It is possible that conflicts of interest may arise in connection with the portfolio managers management of the registrants investments on the one hand and the investments of other accounts or vehicles for which the portfolio managers are responsible on the other. For example, a portfolio manager may have conflicts of interest in allocating management time, resources and investment opportunities among the registrant and the other accounts or vehicles he advises. In addition, due to differences in the investment strategies or restrictions among the registrant and the other accounts, a portfolio manager may take action with respect to another account that differs from the action taken with respect to the registrant.
In some cases, another account managed by a portfolio manager may provide more revenue to C&S. While this may appear to create additional conflicts of interest for the portfolio manager in the allocation of management time, resources and investment opportunities, C&S strives to ensure that portfolio managers endeavor to exercise their discretion in a manner that is equitable to all interested persons. In this regard, in the absence of specific account-related impediments (such as client-imposed restrictions or lack of available cash), it is the policy of C&S to allocate investment ideas pro rata to all accounts with the same primary investment objective.
In addition, certain of the portfolio managers may from time to time manage one or more accounts on behalf of the Advisor and its affiliated companies (the CNS Accounts). Certain securities held and traded in the CNS Accounts also may be held and traded in one or more client accounts. It is the policy of the Advisor however not to put the interests of the CNS Accounts ahead of the interests of client accounts. The Advisor may aggregate orders of client accounts with those of the CNS Accounts; however, under no circumstances will preferential treatment be given to the CNS Accounts. For all orders involving the CNS Accounts, purchases or sales will be allocated prior to trade placement, and orders that are only partially filled will be allocated across all accounts in proportion to the shares each account, including the CNS Accounts, was designated to receive prior to trading. As a result, it is expected that the CNS Accounts will receive the same average price as other accounts included in the aggregated order. Shares will not be allocated or re-allocated to the CNS Accounts after trade execution or after the average price is known. In the event so few shares of an order are executed that a pro-rata allocation is not practical, a rotational system of allocation may be used; however, the CNS Accounts will never be part of that rotation or receive shares of a partially filled order other than on a pro-rata basis.
Because certain CNS Accounts are managed with a cash management objective, it is possible that a security will be sold out of the CNS Accounts but continue to be held for one or more client accounts. In situations when this occurs, such security will remain in a client account only if the portfolio manager, acting in its reasonable judgment and consistent with its fiduciary duties, believes this is appropriate for, and consistent with the objectives and profile of, the client account.
C&S Compensation Structure.
Compensation of C&Ss portfolio managers and other investment professionals has three primary components: (1) a base salary, (2) an annual cash bonus and (3) long-term stock-based compensation consisting generally of restricted stock units of C&Ss parent, CNS. C&Ss investment professionals, including the portfolio managers, also receive certain retirement, insurance and other benefits that are broadly available to all of its employees. Compensation of C&Ss investment professionals is reviewed primarily on an annual basis.
Method to Determine Compensation.
C&S compensates its portfolio managers based primarily on the scale and complexity of their portfolio responsibilities and the total return performance of funds and accounts managed by the portfolio manager versus appropriate peer groups or benchmarks. C&S uses a variety of benchmarks to evaluate the portfolio managers performance for compensation purposes, including the NAREIT Equity REIT Index with respect to Messrs. Cohen, Steers, Harvey and Cheigh; and the Russell 1000 Value Index with respect to Mr. Helm. In evaluating the performance of a portfolio manager, primary emphasis is normally placed on one- and three-year performance, with secondary consideration of performance over longer periods of time. Performance is evaluated on a pre-tax and pre-expense basis. In addition to rankings within peer groups of funds on the basis of absolute performance, consideration may also be given to risk-adjusted performance. For funds and accounts with a primary investment objective of high current income, consideration will also be given to the funds and accounts success in achieving this objective. For managers responsible for multiple funds and accounts, investment performance is evaluated on an aggregate basis. C&S manages certain funds or accounts with performance-based advisory fees. Portfolio managers are also evaluated on the basis of their success in managing their dedicated team of analysts. Base compensation for portfolio managers of C&S varies in line with the portfolio managers seniority and position with the firm.
Salaries, bonuses and stock-based compensation are also influenced by the operating performance of the Advisor and CNS. While the annual salaries of the Advisors portfolio managers are fixed, cash bonuses and stock based compensation may fluctuate significantly from year to year, based on changes in manager performance and other factors.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
DVM
|
|
(a)
|
|
(b)
|
|
(c)
|
|
(d)
|
|
Period
|
|
Total number of
shares purchased
|
|
Average price
paid per share
|
|
Total number of
shares purchased
part of publicly
announced plans
or programs
|
|
Maximum number (or
approximate dollar
value) of shares (or units)
that may yet be
purchased under the
plans or programs
|
|
|
|
|
|
|
|
|
|
|
|
1/1/11 to 1/31/11
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
2/1/11 to 2/28/11
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
3/1/11 to 3/31/11
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
4/1/11 to 4/30/11
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
5/01/11 to 5/31/11
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
6/01/11 to 6/30/11
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
7/01/11 to 7/31/11
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
8/01/11 to 8/31/11
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
9/01/11 to 9/30/11
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
10/01/11 to 10/31/11
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
11/01/11 to 11/30/11
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
12/01/11 to 12/31/11
|
|
3,794
|
|
12.27
|
|
3,794
|
|
N/A
|
|
Note
: On December 14, 2011, the Board of Directors of the Fund approved continuation of the delegation of its authority to management to effect repurchases, pursuant to managements discretion and subject to market conditions and investment considerations, of up to 10% of the Funds common shares outstanding (Share Repurchase Program) effective January 1, 2012 through the fiscal year ended December 31, 2012.
Item 10. Submission of Matters to a Vote of Security Holders.
There have been no material changes to the procedures by which shareholders may recommend nominees to the registrants Board implemented after the registrant last provided disclosure in response to this Item.
Item 11. Controls and Procedures.
(a) The registrants principal executive officer and principal financial officer have concluded that the registrants disclosure controls and procedures are reasonably designed to ensure that information required to be disclosed by the registrant in this Form N-CSR was recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commissions rules and forms, based upon such officers evaluation of these controls and procedures as of a date within 90 days of the filing date of this report.
(b) There were no changes in the registrants internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrants internal control over financial reporting.
Item 12. Exhibits.
(a)(1) Not Applicable.
(a) (2) Certifications of principal executive officer and principal financial officer as required by Rule 30a-2(a) under the Investment Company Act of 1940.
(b) Certifications of chief executive officer and chief financial officer as required by Rule 30a- 2(b) under the Investment Company Act of 1940.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
COHEN & STEERS DIVIDEND MAJORS FUND, INC.
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By:
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/s/ Adam M. Derechin
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Name: Adam M. Derechin
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Title: President and Chief Executive Officer
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Date: March 8, 2012
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Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
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By:
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/s/ Adam M. Derechin
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Name:
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Adam M. Derechin
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Title:
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President and Chief Executive Officer
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(Principal Executive Officer)
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By:
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/s/ James Giallanza
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Name:
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James Giallanza
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Title:
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Treasurer and Chief Financial Officer
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(Principal Financial Officer)
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Date: March 8, 2012
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