Contingent Voting Power


DEFINITION of 'Contingent Voting Power'

A provision granting voting rights to preferred shareholders when the company cannot uphold the obligations outlined in the preferred shareholder arrangement. Contingent voting powers offer the shareholders additional security for holding preferred instruments.

BREAKING DOWN 'Contingent Voting Power'

With preferred stock, the primary source of income is generated from dividends because capital appreciation is minimal. Contingent voting powers may come into effect when the firm fails to make the dividend, eliminating the revenue of the preferred group. Armed with the power to vote, preferred shareholders may seek to remedy the financial difficulties that are restricting dividends by voting in new directors.

  1. Preferred Stock

    A class of ownership in a corporation that has a higher claim ...
  2. Dividend

    A distribution of a portion of a company's earnings, decided ...
  3. Voting Right

    The right of a stockholder to vote on matters of corporate policy ...
  4. Contingent Value Rights - CVR

    A type of right given to shareholders of an acquired company ...
  5. Voting Shares

    Shares that give the stockholder the right to vote on matters ...
  6. Participating Preferred Stock

    A type of preferred stock that gives the holder the right to ...
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