Voting Right

  

Voting. You get to do it if you own common stock. And the votes are kind of unitary, meaning that you basically get one "say" in things, which comes in the form of electing the board of directors. It's the common, not the preferred or the bondholders or big vendors or partners who elect the board, nor is it dead people in Chicago.

Yes, there are proxy votes with major initiatives that common shareholders vote on. But usually, the board aligns one way or another with those votes, and shareholders just line up behind them like lemmings to a slaughter, and vote whichever way the board tells them to vote.

Some companies have super-voting stock, shares which carry multiple votes per share, but also have the identical economic ownership stake in the company.

See: Super-Voting Stock if you care.

Related or Semi-related Video

Finance: What is non-voting stock?4 Views

00:00

finance a la shmoop- what is non-voting stock? hmm well it's stock that doesn't

00:08

vote. bet you're shocked to hear that. most people need a PhD in finance to [stock wears an "I didn't vote" sticker.

00:13

understand that notion. but really that's it in most cases common stock carries

00:17

with it the right to vote. and in fact it's the common shareholders who elect

00:22

the board of directors. but every now and then a potentially hostile investor

00:26

comes along and buys or wants to buy a big chunk of stock in a company. well the

00:32

amount might be a block large enough to elect that potentially hostile investor

00:37

slate or the group of people that investor wants to place on the board to

00:40

represent her evil intentions .when that happens companies will often create a

00:45

class of common stock similar in every way to its normal common only with its [stock checklist of privileges listed]

00:51

voting rights stripped away .that way the investor can own an economic interest in

00:56

the company but not monkey with the board.

Up Next

Finance: What is a proxy?
8 Views

What is a proxy? Proxy statements are documents that are sent to shareholders of public companies that contain detailed information on agenda subje...

Finance: What is Cumulative Voting?
6 Views

What is Cumulative Voting? When public companies have ballots for shareholders to vote for board members, shareholders have a total number of share...

Find other enlightening terms in Shmoop Finance Genius Bar(f)