Do investors want to vote?

Author: | Published: 9 Dec 2014

This instalment of Corporate Governance Quarterly asks whether investors are interested in anything more than the bottom line

There is ample market evidence that voting is not important to most investors in publicly traded companies. When companies have both voting and non-voting stock listed, the non-voting shares often trade at higher prices than the voting shares. When companies have both shares that carry a single vote (one vote per share) and multiple vote (usually five or 10 votes per share) listed, because there are usually more of the former available for trading than the latter, it is common for the multiple vote shares to trade at a 10% or greater discount to the price of the single vote shares.

Clearly, the importance of voting changes depending on the type of stockholder. To a great extent it is aligned to the stockholder's status as an owner or (only) a short-term investor....