Legal Definitions - stock exchange

A stockholder of record refers to the individual or entity officially listed in a company's internal records as the owner of its shares on a specific, predetermined date, known as the record date. This designation is crucial because it determines who is legally entitled to receive dividends, exercise voting rights at shareholder meetings, or participate in other corporate actions such as stock splits or rights offerings. While many investors hold shares through brokerage accounts, the stockholder of record is the one whose name appears directly on the company's official shareholder register, rather than the brokerage firm's name.

• Example 1: Dividend Distribution

  Imagine "GreenTech Innovations Inc." declares a quarterly dividend payable on November 15th to all stockholders of record as of October 31st. If Ms. Eleanor Vance is listed in GreenTech's official shareholder ledger as owning 500 shares on October 31st, she is the stockholder of record for this dividend. Consequently, she will receive the dividend payment, even if she decides to sell her shares on November 5th, after the record date but before the payment date.

• Example 2: Voting at an Annual Meeting

  "Global Logistics Corp." announces its annual shareholder meeting for June 20th, with a record date of May 15th to determine who is eligible to vote on company matters, such as electing board members. Mr. Robert Chen, who is registered as owning 1,000 shares in Global Logistics' books on May 15th, is the stockholder of record. He will receive proxy materials and be entitled to cast his votes at the meeting, even if he sells his shares on May 20th. Conversely, someone who buys shares on May 16th would not be a stockholder of record for this particular meeting and would not have voting rights for it.

• Example 3: Stock Split Entitlement

  "PharmaCo Solutions" announces a 2-for-1 stock split, meaning that for every share a shareholder owns, they will receive an additional share. The company sets a record date of December 10th for this split. If Dr. Anya Sharma is recorded in PharmaCo's books as owning 200 shares on December 10th, she is the stockholder of record. She will automatically receive an additional 200 shares as a result of the split. If she had sold her shares on December 9th, the new owner, provided they were registered by the record date, would become the stockholder of record and receive the split shares.