One-share-one-vote rule

The principle that all shareholders should have equal voting rights in public companies and each shareholder should have one vote.

One-Share-One-Vote Rule

A rule in which each common share in a publicly-traded company represents one vote at meetings of shareholders. That is, two persons each holding one share have one vote each. However, one person who holds two shares has two votes. Nearly all publicly-traded companies follow the one-share-one-vote rule.

References in periodicals archive ?

from the one-share-one-vote rule that subsequently became the norm.

voting by proxy and providing for a one-share-one-vote rule in

ownership, the Mohawk adopted a one-share-one-vote rule from the outset?

voting, while 63% followed a one-share-one-vote rule.

The evolution of shareholder voting rights: separation of ownership and consumption

While the one-share-one-vote rule has been the tradition in the United States, increasing numbers of firms with multiple classes of shares are being listed on the exchanges.

In these scenarios, the firm's issuance of multiple classes of shares will be dominated by the one-share-one-vote rule in that inferior management teams will not be appointed to run single-voting-class firms.

Furthermore, how would the optimality of the one-share-one-vote rule be affected if shareholders of different classes were able to write binding contracts with respect to managerial compensation and golden parachute packages?

Table 1 summarizes results of the One-Share-One-Vote rule.

Thus, the value of the firm under the One-Share-One-Vote rule equals:

The One-Share-One-Vote rule leads to employment of the most efficient management team; that is, total asset value is maximized under the management team selected under the One- Share-One-Vote rule.