Voting rights

The right attached to most ordinary shares to vote on certain corporate matters - electing directors, approving mergers, and sometimes executive pay - usually one vote per share.

Example

A holder of 1,000 shares out of 50 million controls 0.002% of the vote.

Important

A vote is not a claim on money, and at individual scale it is not influence either. Some companies issue share classes with different voting power, so check which class you are buying.

Related terms

• Common stock — An ownership share in a company that carries a residual claim on its assets and earnings - whatever is left after every creditor and preferred holder has been paid - usually together with a vote on certain corporate matters.
• Shareholder — Someone who owns shares, equity, in a company.
• Preferred stock — A class of shares ranking ahead of common stock for dividends and in a wind-up, usually paying a fixed or formula-based dividend and usually carrying no vote.

Lessons that explain it

• Two shareholders can own the same percentage and receive very different amounts — Common and preferred shares can represent the same ownership percentage, but preferred shares usually come with rights - especially liquidation preferences - that decide who gets paid first when a company is sold. (10 min)
• What a share actually is: last in line, and why that is the point — A share of common stock is a residual claim - everything that is left after every other claimant has been paid. That single fact explains most of what equities do. (9 min)

All 578 terms in the Investing glossary