Posted at 8:00 a.m.
I’m a stock marketer, owning small amounts of stock in a multitude of companies. I regularly receive invitations to attend shareholder meetings virtually or by correspondence. These invitations are often accompanied by ballots for various decisions that must be endorsed by the vote of the shareholders. What is the weight of my vote? Is each shareholder entitled to a vote of equal value, or is it prorated to the number of shares he owns?
Luc Labelle
In order to adequately answer this question, The Press called on Charles-Antoine Montreuil, Wealth Management Advisor and Portfolio Manager at Groupe Financier Brunet Gilbert Paquet, affiliated with National Bank Financial.
“Holding shares entitles you to a portion of profits (including dividends). On the other hand, a lesser known, but just as important, right of the shareholder is the right to vote”, underlines Charles-Antoine Montreuil first.
“When you own common stock in a company, you are part owner of that company. Because of this, an ordinary shareholder of a listed company has certain rights relating to his investment in shares, and among the most important of these is the right to vote on certain corporate matters.
“Thus, shareholders elect the board of directors and vote on fundamental structural changes to the company. They also have the right to vote on issues that directly affect their shareholder base, such as a stock split or a proposed merger or acquisition,” says the financier.
The latter adds that then the number of votes per share can vary and depends on the type of share you own. Typically, he says, companies give shareholders one vote per share, giving shareholders who invest the most in the company a bigger voice in corporate decisions.
The Alphabet example
An interesting example of a company with multiple classes of shares is, according to him, Alphabet (owner of Google). He correctly points out that there are therefore shares that trade under the symbol “GOOGL”, which are Class A shares with one vote per share. There is also a class of shares that trade under the symbol “GOOG”, which are Class C non-voting shares, as well as non-exchange-traded Class B shares. The latter are held by insiders of the company and benefit from 10 votes per share. This is called multi-voting shares.
“Because shareholders have influence proportional to their stake, certain market players or activist investors called ‘hostiles’ will accumulate a large stake in a company by buying a large number of shares. This will allow them, when they have sufficient shareholder power, to influence a vote, to intervene and direct the direction of the company or to become the majority shareholder of the company,” he says. .
“In short, although for the smallest investors, the right to vote may seem trivial, it can be very useful for monitoring the internal developments of the company and thus ensuring that there are no surprises! »
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