Cevian Capital has called on Avian PLC (LON:AV.) to return £5bn to shareholders but for obvious reasons, special dividends are out of fashion this year.

The corporate knee-capper, which has built up a near 5% stake in the insurance giant, is following a well-used script of using that stake to agitate for a quick return on its investment.

To be fair to the activist investor, it is not unusual for a company to shell out a special dividend after it has sold off parts of the business for tidy sums, and Aviva has certainly done that; eight businesses have been lobbed out for £7.5bn but the insurance giant has yet to reveal what it will do with the money.

In contrast, Tesco PLC (LON:TSCO), for example, returned £5bn to shareholders via a special dividend following the £8.2bn sale of its Thailand and Malaysia businesses at the end of 2019 and made a one-off £2.5bn contribution to the company pension scheme to boot.

Similarly, B&M European Value Retail SA (LON:BME), the cut-price retailer, paid £450mln in special dividends in fiscal 2021, having paid £150mln in special divis in fiscal 2020 following the sale and leaseback of its Bedford facility.

Ferguson PLC (LON:FERG), meanwhile, gave US$400mln to its shareholders via a special dividend following the disposal of Wolseley UK, its plumbing and heating distribution business in February 2021.

Not all of the special dividends have come in the wake of a disposal. The term usually used by companies when announcing special dividends is “returning surplus cash”, and in the case of Rio Tinto PLC (LON:RIO), which paid out US$1.5bn in special dividends this year, this surplus came about after the company tightened its belt dramatically during pandemic-hit 2020 only to see commodity prices rebound strongly.

Admiral PLC (LON:ADM), the car insurer, has paid out special dividends every year since 2004, suggesting that surplus cash is built into the business model.

If Admiral’s management seems prone to hedging its bets when it comes to determining how much working capital it needs to have, spare a thought for Holiday Inn hotels group InterContinental Hotels Group PLC (LON:IHG), which cheerfully paid out special dividends in 2012, 2013, 2014, 2016, 2017 and 2018.

What could possibly go wrong?

In 2020, the year of the pandemic, the company binned its final dividend altogether in respect of 2019 and paid no dividends at all in 2020. By the end of 2020, it was negotiating with its bankers for waivers and relaxation of its banking covenants.

British Airways owner International Consolidated Airlines SA (LON:IAG) is another that is perhaps regretting paying out a special dividend, in its case a special that cost it roughly €700mln in 2019.

So, there are examples Aviva can point to of companies that were maybe too hasty to splash the cash.

In Aviva’s case, the board’s stated intention is to “deliver a sustainable pay-out ratio and grow dividend per share by low to mid-single digits”.

“Under our capital framework, we expect to return to shareholders excess capital above 180% Solvency II shareholder cover ratio after allowing for investment in the business and once our Solvency II debt leverage ratio has been reduced below 30% and we have completed our major divestments,” the company said in its March full-year results statement.

If that all sounds a bit “think of a number and halve it” then Cevian Capital would probably agree. It believes that within three years Aviva should have a share price of more than £8 per share and be paying a dividend of 45p or double the current payout.

The stock is currently yielding 5.11% but in the last 10 years yields of 7.5% or even higher have not been unheard of, suggesting that generous dividends do not always bring about the sort of share price re-rating Cevian appears to be banking on.