As a shareholder, you’re entitled to a number of privileges and rights governed by laws in the state where the company is located. Keep in mind that the most important shareholder rights include the right to share in company profitability, income and assets, a degree of control and influence over company management selection, pre-emptive rights to newly issued shares, as well as general meeting voting rights. Keep reading as we explore each of these.
- Right to Share in Profitability – By law, shareholders are free to participate in a company’s profitability for as long as they own shares. Note that shareholders also have the rights to income distributions through dividend payments. Should a company’s board of directors declare a dividend at any time, shareholders are the ones in line to receive it.
- Right to Control Over Management – In addition to sharing in profitability, shareholders also have the right to influence company management through the election of a board of directors. Be aware that shareholders have the right to influence who holds management positions through control over board member election.
- The Right to Buy New Shares – Have you ever heard of pre-emptive rights? Here’s how they work: If a company issues new shares to the public, current shareholders have the right to buy more shares before the stock becomes available to new potential shareholders. Since they’re provided at a subscribed price on a per-share basis, pre-emptive rights can be incredibly valuable to common shareholders.
- The Right to Vote – Here’s probably the greatest right for common shareholders. While there are limitations here and there, nothing quite compares to being able to vote in a company’s annual meeting. Whether in person or via proxy, shareholders have the right to vote on major shifts within a publicly traded company. Quick note here: It’s typical for one vote to be equated to one share. So the more shares you own, the greater influence you have as a shareholder.
Concerned About Your Shareholder Rights?
If you feel your shareholder rights have been violated in any way, it’s important to pursue legal action. At the law firm of Sadis & Goldberg, we have developed a strong corporate governance and shareholder rights activism practice. Our experienced attorneys believe that such activism and an insistence on true corporate democracy leads to more sound corporate governance. What does that mean for you exactly? Simply put, it improves the likelihood of enhancing your value as a shareholder.
Here are just a few highlights of our Shareholder Activism practice:
- Represented Ader Investment Management in a successful short-slate proxy contest to install director on board of IGT. Proxy contest coincided with 56 percent stock price increase from the time of announcement to six months after the vote.
- Representing prominent activist investor Bulldog Investors and affiliate Full Value Advisors in several activism-related matters.
- Representing SpringOwl Asset Management in forming activist investment fund, planning ongoing activist strategies, and forming entities through which investors may participate directly in activist contests.
How Our Securities Litigation Team Can Help
Since 1997, our law office has regularly represented investors, investment advisers, industry professionals, and brokerage firms in the financial services industry. From shareholder rights to whistleblower rights, the seasoned lawyers at Sadis & Goldberg have the knowledge required to effectively take on your case.
What’s so different about our securities attorneys? Well, we have a wide range of experience in the industry and include former SEC attorneys. Clients feel at ease knowing that we’ve won numerous multi-million dollar securities arbitrations, verdicts, awards, and settlements for clients.
Let our attorneys help you recover losses from investment misconduct. From hedge fund fraud and securities fraud to stock broker fraud and everything in between, choose Sadis & Goldberg. Speak to an attorney today.