large corporations have large number of shareholders. Then, does every shareholder enjoy voting rights? in case of election of board members? how does that really work?
In: Other
Each shareholder gets one vote per share of stock, in most implementations. So it’s not “equal rights” in the normal one-person-one-vote sense of the term.
The board puts out a slate of board members, often only 1/3 to 1/2 of the board is elected each year. Following certain procedures others can get their name on the ballot or conduct a write-in campaign. Each company has their own rules and schedules, under loose scrutiny of the Securities and Exchange Commission in the US. Outside the US, expect even more variation.
Companies often have A and B stocks, sometimes C stocks as well. The difference is their voting rights. So not all shares gives you a vote, but they do give you dividends and other benefits. Each year the company have an annual shareholder meeting. There are a few things that can only be decided by the shareholders, such as the board members and the budget. But not all shareholders will attend, even those with voting rights. You can delegate your vote to someone else, for example the existing chairman or someone else you trust. You can also mail in your vote. A lot of smaller shareholders will not even bother voting.
Yes, each shareholder can cast a vote per share owned. So somebody with 1 share or 10 shares has 1 or 10 votes, while a mutual fund with 1 million shares gets 1 million votes. Also, there are times when there are different classes of voting shares, eg. public shares might get one vote while the class held by founder and pre-IPO investors have 2 votes per share or some sort of setup to that effect — that’s how Mark Zuckerberg basically has veto power of Meta despite not owning 50% of shares.
Each common share of a company has one vote. There are often types of shares available that do not have voting rights but common shares typically give you the right to vote in any company business that requires it. If you own these shares, your broker would make arrangements either online or by mail whenever a vote comes up. It will notify you that there is something that you can vote on, what the options are, and what option the company board recommends, and how to cast a vote.
Latest Answers