This article was published on the ChosunBiz MoneyMove (MM) site on Sept. 24, 2025, at 5:59 p.m.
U.S. President Donald Trump recently drew attention by playing the "golden share" card to prevent the shutdown of U.S. Steel's Illinois plant after its acquisition by Nippon Steel.
He approved the sale of U.S. Steel in June on the condition that he be granted one golden share in the president's name, and he used the special veto rights included in that golden share to force Nippon Steel to back down. It was a symbolic case showing that the government's single veto-bearing share had returned as ammunition for industrial policy.
What is a golden share, a stock that can wield powerful authority even if only one share is held? Coincidentally, golden shares drew attention domestically not long ago. Hyun-Joo Park, chairman of Mirae Asset Group, publicly said that "considering the introduction of golden shares for founders is necessary." She reportedly meant institutionalizing a minimum core decision veto right to protect long-term investment in innovative companies, given that Korea's commercial law system offers weak tools for defending management rights.
A golden share is a stock that allows its holder to exercise veto power over major decisions such as the disposal of a company's key assets or mergers with only a small equity stake. It is usually granted to governments or founders.
The origin of the golden share goes back to the 1980s. It was introduced during the privatization of state-owned enterprises in telecommunications, airports and aviation under British Prime Minister Margaret Thatcher's government. The idea was to transfer corporate ownership to the private sector while reserving a government veto over the sale of core assets. Several European countries later adopted the same approach.
However, in the 2000s the European Court of Justice put limits on golden shares. It found the golden shares held by governments in companies such as BAA in the U.K., Portugal Telecom and Spain's Telefónica to be illegal, saying they were unfair restrictions that discouraged foreign capital inflows. Since then, Europe has narrowed the scope of golden shares and made their use exceptional and subject to clear purposes.
As seen in the Nippon Steel case, the United States also uses golden shares. In the U.S., golden shares are mainly used in the Committee on Foreign Investment in the United States (CFIUS) process. Through a national security agreement, one golden share can be given conditions equivalent to a veto right.
This is similar to Italy's "golden power." Italy's golden power, introduced in 2012, allows the government to be notified in advance of transactions in certain sectors such as energy or telecommunications and to grant conditional approval or rejection. In that it effectively grants a public veto, it is similar to the U.S. golden share.
While a golden share originally refers to a special share held by the government, it is also commonly used to mean a dual-class or multiple-vote share granted to founders. The golden share that Chairman Park mentioned falls into this category.
In the U.S., major big tech companies such as Alphabet, Google's parent company, and Meta (formerly Facebook) have given founders super-voting rights. By granting 10 votes per share, founders can exercise voting power over major matters even if their equity declines.
Canadian e-commerce company Shopify went so far as to grant a special class of founder-only shares. It fixed Tobias Lütke's voting power at 40%, enabling him to exercise strong influence regardless of changes in equity.
What about Korea? Domestically, only the latter case exists, that is, multiple-vote shares granted to founders. In 2023, a special rule for venture companies was introduced allowing founders to be granted up to 10 votes per share. But this is possible only under several strict conditions. This is likely why Chairman Park emphasized the need for "golden shares" even though multiple-vote rights were legalized.
Multiple-vote shares of unlisted startups are valid for 10 years after issuance, and must be converted to common shares within three years after listing. Also, for some agenda items only one vote per share can still be exercised, making them limited.
It is practically very difficult to introduce multiple-vote rights for listed companies. When an unlisted company goes public, they expire within three years, and although a company can introduce veto-type preferred shares through its articles of incorporation, it must overcome high hurdles such as passing a special resolution and review by the Korea Exchange.