Stockholder: meaning, definitions and examples

Etymology

• The word 'stock' comes from the Old English 'stoc', meaning 'stump' or 'tree trunk', which relates to the idea of ownership or possession.
• In 1600s, the term was used to refer to a supply of goods or funds, which eventually evolved into shares of a company.
• Combining 'stock' with 'holder' emphasizes the concept of someone maintaining ownership or control over a portion of a company's assets.

Economics

• They have a stake in the performance of the company, which means their financial success is tied to how well it does.
• Voting rights during shareholder meetings allow stockholders to influence company policies and decisions.
• Dividends, a portion of the company’s earnings, are often paid out to stockholders, rewarding them for their investment.

History

• The first joint stock company was established in the early 1600s to fund voyages to the New World, paving the way for modern stockholding.
• As industrialization grew in the 19th century, more businesses turned to stockholders for capital investment to expand.
• Legislation in the 1930s in the United States introduced regulations to protect stockholders during stock market crashes.

Legal

• Stockholders are protected by laws that give them rights in matters such as mergers and liquidations.
• They can take legal action against companies if they believe their rights are being violated.
• In many countries, corporate governance laws require companies to act in the best interests of their stockholders.

Pop Culture

• Movies often depict stockholders as powerful figures in corporate takeovers, adding drama to plots about business and finance.
• The term has entered mainstream language, often used to describe someone with stakes in a company, even in metaphorical contexts.
• Television shows about high finance often feature characters who are stockholders embroiled in ethical dilemmas.