Don't Dilute or Abridge the Bundle of Rights of Share Ownership

Sanford Lewis, Director, Shareholder Rights Group

Filing shareholder proposals is a fundamental right of investors who own shares in publicly traded companies. The “bundle of rights” acquired with the purchase of stock includes the right to file and vote on proposals.

The annual ritual of floor debate at corporate annual meetings, as well as the publishing of shareholder proposals in company proxy statements that precedes the meeting, is an integral part of the fundamental bargain struck between investors and shareowners—in exchange for capital, shareholders gain unique rights to bring issues in front of corporate management.

The investment marketplace values the rights to vote on shares, which includes the right to file proposals. That is why in a dual class share company, a share of stock that does not include voting rights is typically valued lower than a share with such rights. Investors are paying a premium

Efforts to dilute or abridge these property rights of investors should not be entertained by the Securities and Exchange Commission.