| Abstract: | In early American corporations, the power of large shareholders was frequently limited by voting rules that partially disenfranchised them. In particular, stock held in an individual's name was granted a number of votes per share that decreased with the number of shares held. Using data from the corporations created in New York up to 1825, this paper analyses the use of these ‘graduated’ voting rights. Consistent with the view that they were intended to help small investors protect themselves against the predations of controlling shareholders, the data indicate that graduated voting rights were imposed in industries that attracted small investments from ordinary households. The results highlight the importance of concerns over the controlling influence of large shareholders in early corporate governance. |
