Multiple votes as a reward to loyal shareholders: A reform proposal

• Main Author: Lepetić Jelena
• Format: Article
• Language: English
• Published: University of Belgrade, Faculty of Law, Belgrade, Serbia 2019-01-01
• Series: Anali Pravnog Fakulteta u Beogradu
• Subjects: loyalty shares; loyal shareholders; shareholders' voting rights
• Online Access: https://scindeks-clanci.ceon.rs/data/pdf/0003-2565/2019/0003-25651901140L.pdf

In this paper, the author analyses shareholders' multiple voting rights as a reward for their loyalty. Firstly, the definition of loyalty shares is provided both in the narrow and wider sense. Furthermore, the notion of loyalty as a condition for being rewarded, as well as the criteria for determining loyalty in company law, is specially examined. Bearing in mind the solutions in representative comparative legal systems, the author proposes the reform of national company law. Finally, the author points to the fact that the reward provision should be included in the Serbian Companies Act while the relevant provisions of the Capital Market Act and Takeover Act should be amended in order to allow successful reform. Implementation of the reform would allow loyalty in company law, not only linked to special duties, but also to special rights that a shareholder can acquire as a reward for loyalty to the company.