As far as I can tell, your idea is that a shareholder would get one vote per share times the number of years that he/she has owned that share. Is there any legal reason why a company could not simply amend their Articles and Bylaws to adopt such a voting system effective for share purchased after the date of the amendment?

If it’s not legally possible now, couldn’t you lobby some state, such as Delaware, to adopt revisions to their Corporations Code that would allow such bylaws/articles provisions?

I published a Medium column back in December 2014 in which I proposed that only shares bought directly from the issuer would have voting rights and that shares bought from anyone else would not have voting rights.

My idea was that only people who has actually paid money to the company deserved to be trusted with decision power. People who bought stock as a gambling strategy and who put no dollars into the company’s coffers didn’t deserve voting rights nor could they be trusted to exercise them in way that would be to the company’s long-term benefit.

As an alternative, people who bought stock from an exchange would vest voting rights the way stock options vest, e.g. no rights for some “cliff” period of time, maybe 3 years. Maybe 25% vesting after 3 years, 50% vesting after 4 or 5 years etc. so that full voting rights wouldn’t vest until perhaps seven to ten years after the stock was purchased unless you bought the stock directly from the company.

Again, is there some legal reason why some existing company couldn’t adopt these voting rules prior to going public?

Even more interesting would be an experiment where some already existing public company could adopt these rules that would be effective for shares purchased after their adoption date.

Is anyone trying to make this happen?

— David Grace

Graduate of Stanford University & U.C. Berkeley Law School. Author of 17 novels and over 200 Medium columns on Economics, Politics, Law, Humor & Satire.

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