Shareholder
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A Shareholder is an investor who owns equity stock in a corporation.
- Context:
- They can (typically) be associated with Shareholder Rights.
- They can (typically) be associated with Shareholder Duties.
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- They can range from being a Preferred Stock Shareholder (of preferred stocks) to being a Common Stock Shareholder (of common stocks).
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- They can be a member of a Shareholder Population.
- They can be an Individual Shareholder or an Institutional Shareholder (such as a pension fund, mutual fund, or insurance company).
- They can have ShareholderVoting Rights depending on the type of stock they hold, influencing decisions such as electing the Board of Directors, approving mergers, and other corporate governance matters.
- They can have different levels of Influence, ranging from Minority Shareholders to Majority Shareholders or Controlling Shareholders.
- They can receive benefits such as Dividends, Capital Gains, and special privileges depending on their Share Class.
- They can buy shares through the Primary Market (e.g., during IPOs) or the Secondary Market (e.g., through exchanges like the NYSE or NASDAQ).
- They can be subject to Shareholder Activism, where large shareholders push for changes in corporate policy, governance, or strategy.
- They can have their interests represented by Proxy Voting, where a designated representative votes on their behalf at shareholder meetings.
- They can participate in Annual General Meetings (AGM), where major company decisions are presented, voted upon, and discussed.
- They can be affected by Shareholder Dilution if the company issues new shares, reducing their ownership percentage.
- They can be part of a Shareholder Class Action in cases of corporate misconduct or fraud.
- They can differ from other stakeholders, such as Bond Holders, who do not have ownership stakes but instead hold debt securities.
- They can be a source of Shareholder Value, with company management often prioritizing their returns.
- They can sometimes be liable for Insider Trading if they act on non-public information to buy or sell shares.
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- Example(s):
- Early Institutional Shareholders, such as:
- Bazacle Milling Company (1372) in Toulouse, France, had early shareholders known as “pariers,” who could trade their ownership stakes, making it one of the first recorded examples of share-based ownership.
- Isaac le Maire was one of the earliest known shareholders in the Dutch East India Company (VOC), established in 1602, and was involved in organizing shareholder actions against the VOC’s board.
- The French Crown held shares in the French East India Company (1664), using its influence to support French colonial expansion.
- Mitsui Family were early shareholders in the Mitsui Trading House (1673), influencing its development into one of Japan’s first major corporate conglomerates.
- Barings Bank, an early institutional shareholder, invested in the London Stock Exchange when it formalized in 1801, shaping its initial regulatory framework.
- Prominent Founding Shareholders, such as:
- Robert Clive was a notable early shareholder in the British East India Company, leveraging his position in the mid-18th century to influence company policies during its expansion in India.
- Early American investors like Alexander Hamilton owned shares in the Bank of North America (1781), one of the first U.S. public companies, and contributed to its financial strategies.
- Contemporary Activist Shareholders, such as:
- Carl Icahn, a well-known activist shareholder, has taken major positions in companies like eBay, Time Warner, and TWA, using his stake to push for changes in company management and strategy.
- Larry Fink, CEO of BlackRock, Inc., oversees trillions in assets under management, using the firm’s shareholder positions to advocate for ESG (Environmental, Social, and Governance) policies in companies worldwide.
- Contemporary Founding and Controlling Shareholders, such as:
- Jeff Bezos, founder and former CEO of Amazon.com, Inc., retained a significant shareholding in the company even after stepping down, enabling him to maintain strategic influence.
- Elon Musk, the largest individual shareholder of Tesla, Inc., used his significant ownership stake to retain control and influence the company’s direction, especially in the areas of technology and sustainability.
- Masayoshi Son (through SoftBank Group) holds controlling stakes in multiple tech companies and startups, making strategic investments that shape industries such as AI, robotics, and telecommunications.
- Long-Term Institutional Shareholders, such as:
- BlackRock, Inc., a global institutional shareholder, holds significant shares in multiple corporations, using its influence to shape corporate governance.
- The Vanguard Group, a major institutional shareholder, owns large stakes in many of the world's biggest companies, using its voting power to influence corporate policies, sustainability initiatives, and governance.
- Long-Term Individual Shareholders, such as:
- Warren Buffett (through Berkshire Hathaway) holds major stakes in companies such as Coca-Cola Company, American Express, and Apple Inc., known for his long-term investment strategy and influence in corporate governance.
- Bill Gates, a major shareholder in companies like Microsoft and Canadian National Railway, has used his investments to focus on long-term growth and philanthropy through the Bill & Melinda Gates Foundation.
- Uncategorized Instances, such as:
- Charles Icahn owns shares in Apple Inc., which he bought well after the 1980 IPO, and has used his ownership stake to push for changes in the company’s strategy.
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- Early Institutional Shareholders, such as:
- Counter-Example(s):
- a Bond Holder, who holds a debt instrument and does not have an ownership stake in the company.
- a Company Executive who may own shares but holds a position of authority due to their employment role.
- a Stakeholder such as an employee or supplier, who has an interest in the corporation but does not own equity.
- a Debenture Holder with a fixed interest return but no ownership rights in the company's assets.
- a Venture Capitalist who provides early-stage funding but may not hold shares until later financing rounds.
- See: Shareholder Value, Preferred Stock Shareholder, Common Stock Shareholder, Proxy Voting, Shareholder Activism, Institutional Shareholder, Controlling Shareholder, Board of Directors, Annual General Meetings (AGM), Share Class, Capital Gains, Dividend Policy, Primary Market, Secondary Market.
2024
- (Wikipedia, 2024) ⇒ https://en.wikipedia.org/wiki/Shareholder Retrieved:2024-9-29.
- A shareholder (in the United States often referred to as stockholder) of corporate stock refers to an individual or legal entity (such as another corporation, a body politic, a trust or partnership) that is registered by the corporation as the legal owner of shares of the share capital of a public or private corporation. Shareholders may be referred to as members of a corporation. A person or legal entity becomes a shareholder in a corporation when their name and other details are entered in the corporation's register of shareholders or members, and unless required by law the corporation is not required or permitted to enquire as to the beneficial ownership of the shares. A corporation generally cannot own shares of itself.
The influence of shareholders on the business is determined by the shareholding percentage owned. Shareholders of corporations are legally separate from the corporation itself. They are generally not liable for the corporation's debts, and the shareholders' liability for company debts is said to be limited to the unpaid share price unless a shareholder has offered guarantees. The corporation is not required to record the beneficial ownership of a shareholding, only the owner as recorded on the register. When more than one person is on the record as owners of a shareholding, the first one on the record is taken to control the shareholding, and all correspondence and communication by the company will be with that person.Shareholders may have acquired their shares in the primary market by subscribing to the IPOs and thus provided capital to the corporation. However, most shareholders acquire shares in the secondary market and provided no capital directly to the corporation. Shareholders may be granted special privileges depending on a share class. The board of directors of a corporation generally governs a corporation for the benefit of shareholders.
Shareholders are considered by some to be a subset of stakeholders, which may include anyone who has a direct or indirect interest in the business entity. For example, employees, suppliers, customers, the community, etc., are typically considered stakeholders because they contribute value or are impacted by the corporation.
- A shareholder (in the United States often referred to as stockholder) of corporate stock refers to an individual or legal entity (such as another corporation, a body politic, a trust or partnership) that is registered by the corporation as the legal owner of shares of the share capital of a public or private corporation. Shareholders may be referred to as members of a corporation. A person or legal entity becomes a shareholder in a corporation when their name and other details are entered in the corporation's register of shareholders or members, and unless required by law the corporation is not required or permitted to enquire as to the beneficial ownership of the shares. A corporation generally cannot own shares of itself.