What is a dividend?

A dividend is a distribution of a portion of a company's earnings to its shareholders, typically in the form of cash or additional stock. Shareholders own a piece of the company and, as a return on their investment, they receive dividends when the company generates profit. This enables companies to share their success with their investors, providing them with a return on their investment, which can incentivize further investment in the company.

In the context of the other options, the first choice pertains to employee compensation, which is a separate concept from dividends. The second option relates to corporate social responsibility, addressing charitable contributions that may stem from profits but do not represent a direct return to shareholders. The fourth choice involves reinvestment strategies for a company's growth, which pertains to how a company allocates its profits rather than distributing them to shareholders in the form of dividends. Thus, the correct understanding of dividends aligns with option C, as it specifically refers to profits being paid to shareholders.