[ThrustVectoring]

How would this work with someone pulling something similar to Altaba?

Suppose you have $1B worth of stock, and 10% of the value is in the vested voting rights that you'd lose by selling it. Instead of selling part of it on the open market, you sell shares in a shell corporation that holds that stock. Surely the discount in ShellCorp's stock price compared to UnderlyingCorp is less than 10%? And the cost of setting up ShellCorp is going to be far less than losing 10% of the value of your holding.

[notahacker]

Perhaps you'd tie voting rights to a named human beneficial owner, so the prospective purchaser of your shell corporation wouldn't inherit them[1]

Though it might have the interesting side effect of fund managers who exercise their voting rights being better compensated and staying in their jobs longer...

[1]possible to devise some kind of unusual contractual arrangement where the "beneficial owner" retained formal title to the shares but accepted an obligation to both hand over stock yields and vote in the interests of the other party. But this is something you could effectively ban.

[ThrustVectoring]

You can't ban separating out economic interest and formal title to the shares without banning options, forward contracts, and other derivatives on the stock. Like, these are not unusual contractual arrangements. These are standardized and sold on the market. Put options transfer the downside risk to the writer, call options transfer the upside risk to the buyer, futures contracts essentially do both.

[notahacker]

My point was you'd ban titleholders from selling a contract directing them to exercise their votes as a delegate of the purchaser, not the more general separation of title and economic interest which is obviously valuable for a large number of reasons.

(I mean, it's still a bit messy because fund managers have a fidicuary duty to exercise their voting rights on behalf of their own shareholders, but I don't have the ability to dictate a new aggressively activist investor policy to Vanguard)

[eries]

Actually you can do this, without banning those instruments. You have to find a way to make sure when someone creates one of those derivatives the system automatically forfeits the associated votes.

[hobbyjogger]

The term "beneficial owner" also includes anyone who has sole or shared voting power over the security (not just those with sole or shared "formal title", economic interests and/or power to sell or transfer the security).

A major reason for that is trying to prevent "gaming" of votes, along the lines of your footnote [1]. Just like right now, I don't think the LTSE proposal would require an outright ban on these arrangements--it just requires the issuer/exchange to make sure the disclosure requirements for "beneficial owners" are sufficient for them to "reset" the voting clock if/when voting power is transferred.