Is it possible to sell voting rights?
Let's say I own some stock but don't care about the voting rights at all. Can I keep the stock but sell the right to vote on corporate issues to someone else?
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Yes. Sort of.
In theory, you could loan your stocks to a short-seller for a fee. Investopedia says that the voting rights pass to the borrower (presumably until the sale), but if they are never the holder of record, it would be the buyer who then holds voting rights in the usual manner. Regardless, you’ll have relinquished voting rights for a fee.
When a security is transferred as part of the lending agreement, all rights are transferred to the borrower. This includes voting rights, the right to dividends and the rights to any other distributions. Often, the borrower sends payments equal to the dividends and other returns back to the lender.
- Investopedia
Unfortunately, the parties doing the lending tend to be the 'big boys', rather than individual investors:
Securities lending is generally conducted between brokers and/or dealers and not individual investors.
- Investopedia
I came across something purported to be investor-level stock-lending, but I have no experience with it:
For stock investments too, you can either hold on to your shares and wait for them to appreciate in value or lend your securities through the Security Lending and Borrowing (SLB) scheme to earn money in the interim.
- Narendra Nathan, ET Bureau
By loaning your stocks, you can enter into an agreement where you continue to receive dividend payments and get your stocks back at some point determined by the agreement, earn some money and forego voting rights. If you package those pieces in a different way, you might consider this to be selling your voting rights while synthetically retaining all the other benefits of owning the shares.
If you're willing to go to the trouble of entering into an agreement, why not simply agree to accept a fee in return for sending the other party as your proxy? The pragmatic answer to that question is that there is an established market for loaning shares to short-sellers, whereas the market for buying proxy votes is, to be polite, considerably smaller - especially when a general meeting of the company isn't looming.
If you want the financial benefits of owning the stock without voting rights, there are derivatives that can approximate that. For instance, buy a call option and sell a put option at the same strike price. Or just buy the most ITM call option you can find.
You can buy some stocks as preference shares, who haven't the right to vote. Those stocks often have a slightly different development to the ordinary shares, but not necessary a better one.
But preference shares will give you advantage for dividents, at least in germany. There are some different variant of preference shares, and usually you get a higher divident or guaranteed dividents.
Since i am not sure if i used the right terms in english, i give you example stocks for Volkswagen:
ISIN: DE0007664039 - preference share
ISIN: DE0007664005 - ordinary share
The voting right stays at the company for a preference share, so you basically sell your vote to the company for better dividents.
I don't know if you can sell them but there is a way to give your voting rights away by designating your proxy to vote as you direct.
For a annual meeting vote, most shareholders don't attend. Instead shareholders are given a mechanism to inform the corporation how they wish to vote on the items scheduled to be voted on. This mechanism was by mail in the past, but now it is more likely to be via the web, or even an app on somebody's phone.
If shares are held by a mutual fund they also vote in these corporate elections; these fund companies or public employees retirement funds can control significant number of votes.
When designating how to vote, the shareholder can direct them to vote yes, no, or to abstain. In some situations the proxy vote just wants to be counted as present for the purposes of achieving a quorum.
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