The practice of so-called “empty voting” has joined the growing list of shareholder rights issues roiling Corporate America. Like the other issues intertwined with the thorny concept of shareholder democracy, it promises to be no less complicated to unravel.
In its simplest terms, empty voting refers to the decoupling of economic interest and voting rights—say, by a short-seller borrowing shares to vote in a company’s annual meeting, then dumping them back to the owner while the short-seller reaps some financial gain from moves in the stock price. University of Texas Law School professors Henry Hu and Bernard Black, who are credited ...