What is non-voting stock?

It's stock that gives the shareholder little or no vote on corporate issues such as mergers or the election of the board of directors. This kind of share might appeal to investors who want to reap rewards from a company's performance but are less interested in influencing its direction.

Where have you heard about non-voting stock?

Non-voting shares often arise when company founders or directors seek to raise new share capital but don't want to dilute their control. In such cases they often issue large numbers of non-voting shares while keeping control of the original voting stock.

What you need to know about non-voting stock.

Non-voting stock usually has other benefits associated with it to compensate for the lack of ability to vote at the Annual General Meeting. Most preferred stock is non-voting, for example, but it has a guaranteed dividend, while most voting stock doesn't.

Many countries including Britain, Germany and Russia have laws or policies against non-voting stock. In the US not all corporations offer voting stock and non-voting stock. Warren Buffett's Berkshire Hathaway does, for example: its Class B stock carries 1/10,000th of the voting rights of the Class A stock, but 1/1,500th of the dividend.