Want to change a company from the inside-out? Buy their stock


When you buy a stock, you become a part owner of a company. If that company makes a profit, you earn the right to potentially take a little bit of that profit for yourself in the form of dividends. If that company goes out of business, you could become a part owner of their remaining assets. Chances are you won’t have anywhere near as much ownership as the company’s founders or even the CEO, but your little piece of the overall pie matters in the grand scheme of things.

Purchasing a stock also entitles you to another benefit that many investors overlook: voting privileges. Whether you own one share or a thousand shares, you earn the right to say how the company conducts business.

This doesn’t mean you can waltz into a company’s headquarters and boss people around. It also doesn’t mean that you have the deciding vote. Rather, you earn the right to voice your concerns through shareholder votes and meetings.

Best of all, you can help a company actually make a difference in the world. All it takes is just one share.

Buying most stocks entitles you, the shareholder, to voting rights.

When you buy most stocks (or “common stocks”), you get a say in the inner workings of a company. How much of a say you gets depends on how much stock you own. Someone with ten shares will have significantly less voting power than someone with millions of shares. At the same time, every vote counts. If small shareholders band together and vote one way, they could have the same effect or more on a vote

Owners of preferred stock — shares of stock that offer priority access to dividends, among many other assets —  usually don’t get the same voting rights. Certain companies also offer multiple stocks, with one main stock entitling shareholders to voting rights.

Publicly traded companies vote all the time.

A public company can ask their shareholders to vote on anything from hiring/firing executives to changes in a company’s direction. For instance, Facebook ($FB) recently asked their shareholders to vote on whether or not the company should detail how fake news spreads on their site. These were the results:

stock
Twitter/@alexweprin

Billions of votes were cast during this proposal. Yet billions of people couldn’t have possibly voted here. Instead, the number of votes represent the number of shares held by voters. A single person could own millions of shares in a company, though the above numbers likely represent thousands of shareholders. Those with the most voting power and shares thus voted against the proposal.

How can your vote make a difference?

If you buy a common stock, you can vote on these and other proposals. If you own more shares, you have more of a say. When you really want a company to make changes, you could buy more of their stock and vote when the time comes.

Wealthy investors uses investor voting all the time to try and change a company’s future. Carl Icahn, a billionaire investor, is notorious for buying billions in stock and quickly asking the company to vote on his proposed ideas. Since Icahn often buys large quantities of stock, he gets a major say in these decisions, earning him and others like him the title of “activist investor.”

Voters also band together to force a company to do some good. Recently, the majority of ExxonMobil ($XOM) shareholders forced the company to acknowledge global warming and how it will affect their business in the future. Thanks to the vote by individual and institutional shareholders, ExxonMobil could one day stop selling oil and focus more on alternative forms of energy. This could slow down or halt climate change.

How do you vote?

If you want to vote for or against a company’s proposals and referendums, you have to be a shareholder. This means purchasing shares of a stock through your brokerage account. Once you become a shareholder, you’ll receive voting ballots either online or through your mail, and only have a certain amount of time to vote. Voting also takes place at shareholder meetings, which you’re usually entitled to go if you own stock.

The best way to keep an eye on a company’s future votes is to follow the company’s financial news. Every public company has an investor relations website detailing past and future votes. Once you’re a shareholder and up to speed on your company’s activities, you’ll be well on your way to making a difference with your vote.


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