Key Takeaways

  • Super voting rights allow select shareholders to have outsized influence compared to others with the same economic interest.
  • Dual-class share structures often assign super voting rights to founders, executives, or insiders.
  • Class A and Class B shares are the most common vehicles for allocating differing voting powers.
  • Companies like Alphabet (Google) and Meta (Facebook) are prominent examples of businesses with super voting share structures.
  • Super voting rights are often implemented to protect long-term vision and guard against hostile takeovers or short-term market pressures.
  • Investors must evaluate these structures carefully, as they may reduce shareholder influence over governance.

Supervoting refers to shareholders who have significant voting power over other shareholders. Such supervoting status might be given to the owners in a corporation who want to have greater voting power over the other shareholders in a company. But the primary purpose of such voting rights is to give company insiders greater control over the voting rights, and therefore, greater oversight into the board of directors and decisions made. Another reason might be to avoid hostile takeovers, which might occur when certain shareholders with enough ownership percentage attempt to take over the company in a hostile manner without any regard for the other shareholders, owners, board of directors, and officers of the corporation.

In order to structure it properly, the owners of the company will need to ensure that their percentage of ownership provides for greater voting rights than other shareholders who might have greater percentage rights. For example, perhaps an owner has 10% ownership in the company, but a shareholder has 25% ownership in the company. Ordinarily, the shareholder will have greater voting rights than the owner. However, the owner can provide that his shares have 4 to 1 voting allocations, which means that for every share the 25% shareholder has, the owner will have 75% (4 to 1) power over each share. As a result, the owner will have supervoting stock and greater voting power.

Multiple Share Classes

While supervoting shares indicate a different class of common stock, this should not be confused with preferred stock. Supervoting stock is not preferred stock.

Particularly, preferred shares are a wholly unique concept involving a different type of security, which allows the preferred shareholders priority over the following type of activities:

  1. Priority in receiving dividend distributions
  2. Priority in being repaid their capital contribution in the event that the company is forced to liquidate or goes bankrupt

Common stock, however, is the usual form of equity financing that companies use when issuing shares to the public. The corporation has the choice of offering different classes of common stock and/or preferred stock. Furthermore, preferred stock might only be offered to certain investors, board members, and owners of the corporation. With that said, if a company chooses to offer different classes of common stock, the two most commonly used classes include the following:

  1. Class A stock
  2. Class B stock

Generally, a corporation will assign greater voting rights to one of the classes of stock. An example of this would be a company that goes public offering a number of common shares to the public. But a different class of stock would be offered to the officers, board members, and owners. This different class will likely carry several votes for each share owned. This is similar to supervoting stock, as the voting rights per share are greater than one to one. A common proportion given for each share is approximately 10 votes per share, depending on the number of shares offered to the public along with how many owners, officers, and board members are employed by the company.

Common Companies That Use Super Voting Rights

Super voting rights are typically found in dual-class share structures where certain classes of stock—often held by founders and executives—carry multiple votes per share. These structures are most common in technology and media companies where long-term strategic vision is prioritized. Examples of investments and companies that issue super voting shares include:

  • Alphabet Inc. (Google): Class B shares carry 10 votes per share, mainly held by insiders. Class A has 1 vote per share, and Class C has no voting rights.
  • Meta Platforms, Inc. (Facebook): Class B shares with 10 votes per share are primarily held by Mark Zuckerberg and select insiders.
  • Snap Inc.: Public shareholders own non-voting shares (Class A), while Class C shares held by founders provide them full control.
  • Berkshire Hathaway: Although not traditionally a tech company, it features a high-vote Class A share alongside a low-vote Class B share.

If you're wondering which of the following investments have super voting rights, the answer usually involves companies structured with dual- or multi-class stock systems. These are designed to retain founder control even after going public.

Class A vs. Class B Characteristics

When it comes to differentiating between Class A and Class B, most class A shares are superior to Class B shares. Thus, Class A shares will be given to those board members, owners, and officers as opposed to the general public. However, there is no set requirement. The corporation might choose to initiate Class B as the superior voting stock. Due to the difference in share classes, it is important for potential shareholders to conduct research into how many classes of shares the corporation is offering, and if it is offering supervoting stock to insiders. Furthermore, the potential shareholder should also find out if the company is offering preferred stock, as this could result in fewer rights for the shareholder.

Aside from the voting rights, multiple shares of stock have the same rights in every other sense. Therefore, even if the shareholder has less voting rights, he can enjoy the equal rights to the company’s profits. But if a shareholder is particularly concerned with having greater voting rights, he might refrain from purchasing that company’s stock altogether.

Super Voting Preferred Stock

In some cases, companies may issue super voting preferred stock—a hybrid combining the economic benefits of preferred shares with enhanced voting power. This is especially useful in situations where companies:

  • Struggle to obtain sufficient shareholder approval for corporate actions, such as reverse stock splits or capital increases.
  • Are dominated by retail investors who may not vote consistently or strategically.
  • Need to accelerate decision-making through proxy voting with low turnout.

This structure has gained popularity among small-cap and microcap public companies, especially those that face difficulty in governance due to dispersed ownership. Super voting preferred shares may carry 10, 100, or even 1,000 votes per share depending on the company’s charter or bylaws.

Risks and Criticisms of Super Voting Rights

While super voting structures may align with founder vision and stability, they carry certain downsides:

  • Reduced shareholder influence: Public investors may have little say in corporate governance despite owning a large portion of the company.
  • Limited accountability: Founders or insiders with control may make decisions with less oversight or resistance.
  • Index exclusion: Major indices like the S&P 500 have rules limiting inclusion of companies with unequal voting rights.
  • Valuation concerns: Investors may apply discounts to stocks where voting rights are concentrated, perceiving them as less transparent or democratic.

These risks make it essential for investors to research share structures and governance before investing.

Frequently Asked Questions

  1. Which of the following investments have super voting rights?
    Investments in companies like Alphabet, Meta, and Snap often include super voting rights assigned to insiders through dual-class shares.
  2. What is the purpose of super voting stock?
    It provides founders or insiders with disproportionate control to maintain long-term strategic direction and prevent hostile takeovers.
  3. How do dual-class structures work?
    They involve two or more classes of shares with different voting powers, where typically one class is public and the other is retained by insiders.
  4. Are super voting shares legal?
    Yes, they are legal in the U.S. and permitted by the SEC, though they face increasing scrutiny from institutional investors and governance advocates.
  5. Can retail investors buy super voting shares?
    Generally, no. Super voting shares are typically retained by company founders, executives, or early investors, and not available to the public market.

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