Shareholder Suffrage - an introduction Flashcards
Voting is not a right highly used by shareholders in publicly traded corporations.
If voting is not highly used right then what is?
- They often vote by just selling their stock
* When they do vote they usually follow managements recommendations
Today, shareholder populations of most large corporations are heavily weighted with so-called institutional investors.
Name some of these institutional investors.
• Pension funds, insurance companies, mutual funds and bank trust departments
- Usually “passive” investors that don’t involve themselves in matters affecting the internal affairs of the company
What do we understand under “Calpers”?
“Calpers” – the California state pension fund, has frequently taken an active approach.
How do New York City retirement system uses its shareholder status?
New York City retirement system, uses its shareholder status as a “bully pulpit” for pursuing social goals it deems desirable
Are proxy fights rare or frequent?
Proxy fights are rare
What do we understand under majority control?
Majority Control – 1 shareholder or group owns or controls 35% or more of the company’s stock
What do we understand under management control?
Management Control – the largest block of stock owned in these companies does not exceed 5-10% of the outstanding shares of the company
What do we understand under minority control?
Minority Control – a single shareholder or group control somewhere between 10-35% of the company’s shares
Some states have “control share” statutes. What do the states do with these statutes?
Some states have “control share” statutes that are designed as a protection against unwanted takeovers by disenfranchising shares owned by a new controlling shareholder, unless that shareholder is given the vote by a majority of the disinterested shares
