Supervoting stock is a "class of stock that provides its holders with larger than proportionate voting rights compared with another class of stock issued by the same company." It enables a limited number of stockholders to control a company.
Usually, the purpose of the super voting shares is to give key company insiders greater control over the company's voting rights, and thus its board and corporate actions. The existence of super voting shares can also be an effective defense against
hostile takeover
In business, a takeover is the purchase of one company (the ''target'') by another (the ''acquirer'' or ''bidder''). In the UK, the term refers to the acquisition of a public company whose shares are listed on a stock exchange, in contrast to ...
s, since key insiders can maintain majority voting control of their company without actually owning more than half of the outstanding shares.
See also
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Preferred stock
Preferred stock (also called preferred shares, preference shares, or simply preferreds) is a component of share capital that may have any combination of features not possessed by common stock, including properties of both an equity and a debt ins ...
References
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Stock market