It's easy to view the stock market as just a graph of moving numbers, but owning a share actually means you own a piece of a real business. That ownership comes with a voice, and using it is a powerful way to ensure the companies you invest in align with your personal values. Here is how you can exercise your rights as an owner.
What is shareholder voting?
Companies that sell stock are called public companies because the public owns them. When you buy stock, you become a partial owner. Even if you hold 100 shares that equate to just 0.0001% of the company, you're still an owner.
As an owner, you have the legal right to vote once a year on various proposals. This usually happens at an annual meeting, but companies might call a special meeting if there is a matter too urgent to wait. Whether you're a major player or a small shareholder, your voice has power.
How the voting process works
In political elections, we operate on a "one person, one vote" system. Shareholder voting works a little differently. Your vote is weighted based on your financial stake in the company.
When the company totals the votes, they count how many shares voted for or against a proposal. For example, if you own 1,000 shares, your vote counts ten times as much as someone who owns 100 shares.
Four ways to cast your vote
You don't have to travel to a headquarters to make your voice heard. Similar to absentee ballots in political elections, you can vote by "proxy," which just means voting remotely or asking someone else to vote on your behalf. You can vote in four ways:
- At the annual meeting: You can vote in person.
- By mail: You can send in a paper ballot.
- By phone: You can call in your vote.
- On the internet: You can vote digitally.
A few weeks before the meeting, you'll receive printed materials (or an email if you've opted for digital delivery) detailing exactly what is up for a vote.
Attending the meeting in person
If you choose to attend the annual meeting, you'll generally have to pay your own travel expenses. While the voting items remain the same, being there in person gives you a chance to hear presentations from management, meet the board of directors, and potentially ask questions or express opinions on topics not on the official agenda.
Some meetings are lavish events (like those hosted by Berkshire Hathaway), but most are standard business meetings held during normal working hours.
What issues can I actually vote on?
While every company is different, shareholders are generally asked to weigh in on governance and big-picture shifts. Common voting items include:
- Electing directors to the board.
- Deciding which firm audits the financial statements.
- Approving mergers or acquisitions.
- Approving stock splits or dividend payments.
- Setting executive salaries, benefits, and stock compensation plans.
- Fundamental changes to corporate structure or goals.
The ballot often includes proposals from the company directors as well as proposals from other shareholders. Directors will usually advise you on whether the company is for or against a specific proposal, but you're free to vote however you wish.
Shareholder proposals can sometimes serve as a form of protest. Investors may use them to push for changes in environmental practices, company policies, or other controversial factors.
Do I get a vote if I own mutual funds?
The rules above apply if you own individual shares of stock. If your money is in a mutual fund, it's treated differently.
Mutual fund investors generally aren't invited to vote. If you own a mutual fund that invests in 500 companies, it wouldn't be practical for you to attend 500 shareholder meetings. Instead, the fund manager votes on behalf of all the shares they manage.
However, there are signs this landscape is shifting. Investment giant BlackRock, which has $10 trillion under management, announced that it's exploring ways to return voting power to investors. Other firms may follow suit, giving you more say in the future.
The Facet difference
At Facet, we believe your money should reflect your values. While understanding shareholder rights is a great step, it's just one piece of your larger financial roadmap. We don't just manage investments, we look at your entire life to help you achieve self-fulfillment.
Our membership model means we don't charge a percentage of your assets. You get a CFP® professional who works with you to build a personalized strategy that covers everything from retirement planning to how your investments impact the world. We're here to help you navigate these decisions with calm confidence.
