Who has the right to vote at a shareholder meeting?

Ownership of a corporation is represented by its total number of shares. Every share enables its owner the right to vote and, if you own more than one share, you have more than one vote. A shareholder's ability to vote is important, but it can get pretty complicated when a large corporation has to figure out which of its many shareholders have the right to participate in a future vote. In other words, imagine if a company like Google was planning on having a shareholder meeting two months from today. If you took a snapshot of every shareholder who owned a share of Google today, it would likely not be exactly the same group of people in two months. Why? Because, on average, more than 1.5 million shares of Google are traded per day. That's a lot of shares being bought and sold between different people at different times.

Thus, to make it more practical for Google to figure out which shareholders should be notified of the meeting and have a right to vote at the meeting, they set a deadline that says, "Only people who own stock no later than this record date will be allowed to vote at our meeting." In other words, if the record date is set as May 1st, then people who purchase Google shares on May 2nd are not entitled to vote those shares at the meeting. Only those who owned shares either on May 1st or before have the right to vote their shares.

Note that the corporation can set the record date to pretty much whatever they want, as long as the date is no more than 70 days before the scheduled shareholder meeting.