Multiple Voting Shares

A multiple voting share (or high-vote share) is a class of stock that grants two, ten, or even 100 votes per share—far more than the standard one-share-one-vote structure. Most common in Canadian and European public companies, multiple-vote shares allow founders and insiders to maintain voting control whilst issuing common stock to the public, enabling capital formation without surrendering governance.

How multi-vote structures work

A company issues two or more classes of stock. Each class has identical liquidation preferences and economic rights (dividends, earnings per share) but different voting power.

Example structure:

With this arrangement, founders own 25% of the equity but control one-third of votes. Public shareholders own 75% but control one-third of votes. The founder class (however minority in economic terms) makes key decisions: board election, major acquisitions, dividend policies, and strategic direction.

The votes attach to shares, not shareholders. If a founder sells their multiple-vote shares to a third party, the buyer acquires all the voting power; the shares do not “revert” to one-vote-per-share unless the articles of incorporation contain automatic-conversion provisions.

Canadian market standard

Multiple-vote shares are most prevalent in Canada, where they are legally permitted and explicitly contemplated by corporate law. Major Canadian public companies use them:

• Shopify issues founder shares (10 votes each) held by the CEO, with public Class A shares (1 vote each).
• Magna International (automotive parts) uses multiple-vote shares for family control.
• Spin Master (toy and entertainment company) maintains founder governance via super-voting shares.

Canadian institutional investors and the Toronto Stock Exchange accept multi-vote structures as standard, though they track the voting concentration and require disclosure. Public investors can buy the lower-vote shares, understanding the governance implications.

European and Scandinavian practice

Nordic countries (Sweden, Norway, Finland) and the UK permit multiple-vote shares. They are often used in family businesses transitioning to public markets, allowing founders’ heirs to retain control. Some European countries require a “one-share-one-vote” rule or impose restrictions (e.g., a ceiling on the vote differential or mandatory conversion after death), but the concept is widely accepted.

Why founders structure this way

Long-term strategy alignment. A founder argues that one-share-one-vote exposes the company to short-termist pressure from hedge funds and activist investors. Multiple-vote shares let the founder execute a 10-year transformation without needing to appease quarterly earnings expectations.

Capital formation. The founder wants to raise billions to fund growth but cannot accept a 51% dilution in voting power. Multiple-vote shares solve this: raise $2 billion in one-vote shares without diluting the founder’s vote.

Founder incentive. If a founder holds 100% of multiple-vote shares and only 5% of economic interest, they have skin in the game (dividends and appreciation accrue 5%) but control all decisions. This is controversial—some see it as entrenchment, others as aligned long-term ownership.

Family succession. A founder can pass multiple-vote shares to heirs, allowing a family to control the company for generations despite owning a minority of equity. This is common in European luxury-goods and industrial-conglomerate dynasties.

Criticisms and controversies

Investor unease. Institutional investors and index funds increasingly oppose non-uniform voting. They view multi-vote shares as enabling founder misbehaviour without market discipline. Some funds have adopted voting policies that exclude or underweight companies with dual-class structures.

Discount to trading price. One-vote shares in a multi-class company often trade at a discount to economically identical shares in a one-share-one-vote company, reflecting the reduced voting power. A shareholder buying Class B at $100 knows they control fewer votes per dollar than a shareholder in a peer company.

Regulatory backlash. In 2015, the US SEC and NYSE considered (but shelved) rules restricting IPOs with extreme voting structures. Nasdaq has proposed similar rules. The UK and Canada have considered limiting vote differentials (e.g., a maximum of 10:1 or 100:1 ratio).

Founder entrenchment and poor governance. Multi-vote structures have historically enabled founder-executives to ignore shareholder input, overpay themselves, or pursue vanity projects. Snap’s Evan Spiegel and Meta’s Mark Zuckerberg have used super-voting shares to fend off activist pressure, drawing criticism that the company’s interests diverge from shareholder interests.

Public market skepticism. Despite acceptance in Canada and Europe, US capital markets are hostile to multi-vote shares. Warren Buffett’s Berkshire Hathaway is a notable exception; most new US IPOs avoid them due to investor demand for governance parity.

Conversion and sunset clauses

To address control-concentration concerns, some multiple-vote share structures include conversion triggers:

• Founder death. All multiple-vote shares convert to one-vote shares, eliminating the super-voting class.
• Change of control. A merger or acquisition triggers conversion to one-share-one-vote, ensuring new owners cannot exploit inherited voting power.
• Time limit. Multiple-vote shares sunset after (say) 15 years, forcing regular renewal of founder governance terms.
• Voluntary conversion. The founder can elect to convert to one-vote shares, signalling commitment to democratic governance.

These provisions balance founder empowerment with shareholder protection.

International comparison

United States. Multiple-vote shares are legal but rare in public companies, stigmatized by the market. Tech founders prefer founder common stock (economically identical, held in voting trusts) or use buyback threats to deter activism. A few exceptions: Berkshire Hathaway (Class A/B structure), Facebook/Meta, Snap, and some media firms.

Canada. Market standard; explicitly permitted and widely used without stigma.

Europe. Permitted in UK, Nordic countries, and much of continental Europe. Some countries (Germany, France) limit multi-vote shares or require heightened disclosure. Luxury-goods and industrial-family businesses routinely use them.

Emerging markets. India, Brazil, and other emerging markets often have multi-vote shares in family-controlled listed companies, though governance standards and disclosure vary widely.

See also