Payment in lieu of a dividend

Cash your broker pays you when your shares were lent out over an ex-dividend date. The company paid its dividend to whoever held the shares that day; the borrower owes you a substitute of the same size. The money looks identical, but it did not come from the company — so it is not a dividend, it usually loses a treaty's reduced withholding rate, and many tax authorities treat it as ordinary income instead. It only happens in a margin account, where your broker is allowed to lend your shares.