Decoupling Voting and Cash Flow Rights

38 Pages Posted: 29 Jan 2024

See all articles by Andre Speit

Andre Speit


Paul Voss

HEC Paris - Finance Department; Finance Theory Group (FTG)

Andras Danis

Central European University (CEU)

Date Written: December 29, 2023


The equity lending and option market both allow investors to decouple voting and cash flow rights of common shares. We provide a theory of this decoupling. While either market enables investors to acquire voting rights without cash flow exposure, empirical studies demonstrate a substantial difference in implied vote prices. Our model explains this surprising difference by uncovering the mechanism by which vote prices in the equity lending market are endogenously lower than those implied by the option market. Nonetheless, we show that even though votes are cheaper in the equity lending market, activists endogenously choose to decouple using both markets.

Keywords: decoupling, empty voting, shareholder activism, vote trading, empty creditor

JEL Classification: G3, G34

Suggested Citation

Speit, Andre and Voss, Paul and Danis, Andras, Decoupling Voting and Cash Flow Rights (December 29, 2023). Available at SSRN: or

Andre Speit

Independent ( email )

Paul Voss (Contact Author)

HEC Paris - Finance Department ( email )


HOME PAGE: http://

Finance Theory Group (FTG) ( email )

United States

Andras Danis

Central European University (CEU) ( email )

Quellenstrasse 51
Vienna, Lower-Austria and Wien 1100

HOME PAGE: http://

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