{"id":461758,"date":"2022-08-16T09:58:05","date_gmt":"2022-08-16T08:58:05","guid":{"rendered":"https:\/\/www.finder.com\/uk\/?p=461758"},"modified":"2024-10-14T09:02:03","modified_gmt":"2024-10-14T08:02:03","slug":"shareholder-voting-rights","status":"publish","type":"post","link":"https:\/\/www.finder.com\/uk\/share-trading\/share-trading-guides\/shareholder-voting-rights","title":{"rendered":"Guide to shareholder voting rights"},"content":{"rendered":"

If you choose to invest in shares in specific companies<\/a> \u2013 rather than in ETFs<\/a> or other types of funds, for example \u2013 you probably do so mainly because you think the company will succeed and make you a profit. What you might not realise is that buying shares also gives you a say in the success of a company, through the right to vote in decisions that could affect its future, and therefore the growth of your investment. Read on to find out more about your shareholder voting rights and how to exercise them.<\/p>

What are shareholder voting rights?<\/h3>

Stock voting rights are the rights that shareholders in a company may have to vote on certain decisions relating to the company. The specific matters that you’ll have a right to vote on depend on the rules of the company (as outlined in its “articles of association”) and the shareholders’ agreement. But, in general, you are likely to have the right to vote on matters that could have a substantial impact on the future (and success) of the company, such as changes to the company name, approving mergers or acquisitions, or changes to company goals.<\/p>

Do all stock owners have shareholder rights?<\/h3>

All stock owners (or shareholders) of “common” or “ordinary” shares have stock voting rights. Ordinary shares are the most common kind of share available to buy when investing in shares on the stock market.<\/p>

Holders of other classes of share may or may not have voting rights. For example, you may come across a class of share called “preferred shares”. These come with no voting rights, but give shareholders priority when it comes to company income. For example, preferred shareholders will be paid dividends<\/a> before common shareholders.<\/p>

If you’re not sure what type of shares you own, or whether you have voting rights, check the paperwork that you received when you bought the shares.<\/p>

By the way, if you’re not even really sure what investing in shares means, let alone stock voting rights, jump straight over to our beginners guide: “What are shares?<\/a>“).<\/p>

How much stock do you need to have voting rights?<\/h3>

Every owner of ordinary shares in a company has voting rights. That applies no matter how few shares you own. However, the number of shares you own is likely to influence how much voting power you have. Typically, 1 share equates to 1 vote. In this case, the more shares you own, the bigger the impact you are able to have on voting decisions. This rule may not always apply though. Some companies give each shareholder a single vote, regardless of how much stock they own.<\/p>

Why do shareholders have voting rights?<\/h3>

Some company decisions have a significant impact on the success (and profitability) of a company. And, fairly evidently, there’s a direct correlation between a company’s success and the price of its shares \u2013 as well as the size of any dividends that shareholders may receive. Voting rights allow shareholders to influence this success and thus how well their investments in the company perform.<\/p>

What influence do I have with my shareholder voting rights?<\/h3>

Shareholder votes are not required for decisions relating to the routine running of the company. Rather, they’re required for exceptional decisions that could have a significant impact on the company’s bottom line. Depending on the company, the matters you may have the opportunity to vote on include:<\/p>