Voting rights are the rights of shareholders to vote on corporate matters. While any class of equity entitling its holders to vote is voting stock, generally only common stock has the right to vote. Matters on which holders of voting stock are usually entitled to vote include the election of members to the board of directors and amendments to the articles of incorporation.
If shareholders are unable to attend shareholders’ meetings, their voting rights may nevertheless be exercised by means of a proxy. A proxy is a legal document appointing one or more persons to represent and vote on behalf of a given shareholder on stipulated matters at a specific shareholders’ meeting. Proxy also refers to a person appointed to represent and vote for a given shareholder on stipulated matters at a shareholders’ meeting in accordance with the shareholder’s instructions.
Proxies must be in writing and, taking the form of a limited power of attorney, are valid only for voting on matters addressed at the specified shareholders’ meeting. The voting authorization given through a proxy is revocable by the shareholder at any time, possibly in the event the shareholder later chooses to attend the meeting or to nominate a different proxy at a later date. All proxies become invalid upon the shareholder’s death.
With dual-class common stock, one class of common stock has superior voting rights.
|Voting Rights of Select Dual Class Companies|
|Class A||Class B|
|Coca-Cola Bottling Co.||1||20|
|John Wiley & Sons||1/10||1|
|Source: Council of Institutional Investors|