Supervoting stock is a stock class whose holders have disproportionately larger voting right than holders of other kinds of stock It enables a limited number of stockholders to control a company.
Usually, the purpose of the super voting shares is to give key company insiders greater control over the company's voting rights, and thus its board and corporate actions. The existence of super voting shares can also be an effective defense against
hostile takeover
In business, a takeover is the purchase of one company (law), company (the ''target'') by another (the ''acquirer'' or ''bidder''). In the UK, the term refers to the acquisition of a public company whose shares are publicly listed, in contrast t ...
s, since key insiders can maintain majority voting control of their company without actually owning more than half of the outstanding shares.
An example of a company that uses super-voting stock is
Alphabet
An alphabet is a standard set of letter (alphabet), letters written to represent particular sounds in a spoken language. Specifically, letters largely correspond to phonemes as the smallest sound segments that can distinguish one word from a ...
, the parent company of
Google
Google LLC (, ) is an American multinational corporation and technology company focusing on online advertising, search engine technology, cloud computing, computer software, quantum computing, e-commerce, consumer electronics, and artificial ...
. It has three classes of shares: Class A, Class B, and Class C. Its Class B shares are super-voting shares, which confer 10 votes per share. They are only held by founders and insiders, and can't be publicly traded.
See also
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Preferred stock
Preferred stock (also called preferred shares, preference shares, or simply preferreds) is a component of share capital that may have any combination of features not possessed by common stock, including properties of both an equity and a debt ins ...
References
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Stock market