What We Talk About When We Talk About Voting: Efficiency and the Error in Empty Voting


Under the shareholder primacy model, shareholders exercise voting
power because their votes are wealth maximizing and efficient. The
practice of decoupling, or the strategic separation of the right to vote
on a share from the economic ownership of that share, undermines
this efficiency. The decoupled investor’s interests are not aligned
with maximizing the value of the corporation and decoupled
investors have, to the detriment of all other shareholders, used their
voting power to dictate inefficient corporate decisions. This Note
advocates for proxy card disclosure of decoupled shares and
subsequent voiding of the decoupled votes. In this way, only those
shares interested in wealth maximization are able to influence
corporate outcome, restoring efficiency to shareholder voting.


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Fordham Journal of Corporate & Financial Law