Shareholder democracy: Why I'm not buying it

I have a confession to make. Each year, around AGM season, my mail box fills with notices of meetings from the various companies I own stock in. But I don't read them. If I'm bored, I'll have a quick flick through the documentation, otherwise they usually go straight into the bin.

Whilst I'm all for engaging with a company's activities – indeed I think you shouldn't bother owning shares unless you're committed to reading the annual results – I don't see the point of spending time filling in voting forms. As a retail shareholder I'm never going to own enough stock to make a difference. My time is better spent trying to more deeply understand businesses.

Of course, there are exceptions. Intelligent Investor's involvement in the RHG saga proves there are issues worth fighting over – but that's the exception not the rule. And the same is true of fund managers, who often own sizable portions of businesses and are paid to assess each vote that gets put before them.

What makes even less sense to me are investors who are willing to pay a premium to own voting stock in a company. Here News Corp is a useful example. Chart 1 shows the price difference between the A-Class (non-voting) and B-Class (voting) (how Orwellian huh?) shares over the past ten years. There's a persistent gap between the two. Investors are willing to pay a premium to have a say. This, of course, makes sense. But as a small shareholder, I'm unlikely to be able to affect change, and since both securities have equal economic share, I'll pick the cheaper of the two.

But maybe I'm wrong, maybe owning voting stock has merit. What's your preference, and why? And do you bother voting?

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