What determines the number of votes a stockholder has?
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How do I know when to vote?U.S. public companies set what is known as a "record date." Investors who own the company's shares on that record date have the right to vote. If you own shares of the company on the record date, the company (or your broker or bank) will send you one of the following three communications:
If you have given consent to receive information electronically, you may receive this correspondence electronically, such as by e-mail. What is a record date?A record date is a date announced by the company as the official date you must be an owner on the company's records in order to participate in the annual meeting and corporate election. Given that the timeframe to settle a securities transaction in the United States. is generally three days, an investor interested in being an owner on record date would have to purchase the company's securities at least three days prior to the record date. How do I vote at a corporate election?Shareholders may vote at a meeting by attending in person, but most shareholders vote by "proxy" without being present in person, as permitted under state law and as required to be permitted by certain stock exchange rules. What is a proxy?A proxy is a written authorization that one person gives to another person to act on the first person's behalf. In the context of corporate elections, when a shareholder votes "by proxy," he or she is instructing someone (often members of the company's management) to vote his or her shares in accordance with his or her instructions, as reflected on the proxy card, at the meeting. This way, the shareholder can vote without physically attending the meeting. What are the mechanics of voting either in person or by proxy?Typically, a company will allow you to vote in one or more of the following ways:
How can I attend the annual meeting and vote in person?Shareholders who are registered on the official books of the company on the record date are entitled to attend a shareholder meeting and will receive materials permitting attendance. These investors are generally referred to as registered or record owners. If you hold securities through a broker-dealer or bank as a beneficial owner, your broker will generally have a process to give you the right to attend the meeting and participate in it on request. For information on how beneficial owners can cast their own votes, rather than voting through a broker, click here. Can I change my vote after I have submitted it?Yes, but the change must be submitted in time to be recorded by the company and before the close of the election. Companies are required to record the last completed proxy prior to the close of the election. Registered owners should contact the company to determine the time the polls close, and beneficial owners should contact their broker to determine how and when changes must be submitted. What do "for," "against," "abstain" and "withhold" mean on the proxy card or voter instruction form?Depending on what you are voting on, the proxy card or voting instruction form gives you a choice of voting "for," "against," or "abstain," or "for" or "withhold." Here is an explanation of the differences: Election of directors: Generally, company bylaws or other corporate documents establish how directors are elected. There are two main ways to elect directors: by plurality vote or majority vote. A "plurality vote" means that the winning candidate only needs to get more votes than a competing candidate. If a director runs unopposed, he or she only needs one vote to be elected, so an "against" vote is meaningless. Because of this, shareholders have the option to express dissatisfaction with a candidate by indicating that they wish to "withhold" authority to vote their shares in favor of the candidate. A substantial number of "withhold" votes will not prevent a candidate from getting elected, but it can sometimes influence future decisions by the board of directors concerning director nominees. A "majority vote" means that directors are elected only if they receive a majority of the shares voting or present at the meeting. In this case, you have the choice of voting "for" each nominee, "against" each nominee, or you can "abstain" from voting your shares. An "abstain" vote may or may not affect a director's election. Each company must disclose how "abstain" or "withhold" votes affect an election in its proxy statement. This information is often found toward the beginning of the proxy statement under a heading such as "Votes Required to Adopt a Proposal" or "How Your Votes Are Counted." Proposals other than an election of directors: Matters other than voting on the election of directors, like voting on shareholder proposals, are typically approved by a vote of a majority of the shares voting or present at the meeting. In this situation, you are usually given the choice to vote your shares "for" or "against" a proposal, or to "abstain" from voting on it. Again, the effect of an "abstain" vote may depend on the specific voting rule that applies. The company's proxy statement should disclose the effect of an abstain vote. http://www.sec.gov/spotlight/proxymatters/voting_mechanics.shtml How many votes does a stockholder get for each stock they own?That's the ratio that describes the voting structure at most companies: one share to one vote. When it comes to voting on everything from board member elections to whether the company should be sold, an investor who owns one share may cast one vote, an investor who owns 10 shares may cast 10 votes, and so on.
How many votes does common stock have?Holders of shares of Class A Common Stock and Class B Common Stock have identical rights, except that holders of shares of Class A Common Stock are entitled to one vote per share and holders of shares of Class B Common Stock are entitled to 10 votes per share.
How do shareholder votes work?Shareholder voting rights give you the power to elect directors at annual or special meetings and make your views known to company management and directors on significant issues that may affect the value of your shares.
Does every shareholder get a vote?The Takeaway
The voting rights of equity shareholders can be summed up pretty simply: Investors of record who own shares of common stock are generally entitled to one vote per share, which they can cast at the annual shareholder meeting to shape company policy — and potentially profitability.
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