Class A Stock vs. Class B Stock: Differences and Examples

The distinction between Class A stock and Class B stock lies primarily in voting rights and ownership structure. Companies may issue multiple share classes to raise capital while keeping control. Each class can carry different privileges and influence. In many cases, class A shares carry more voting power than class B shares, but may be more expensive. These differences affect shareholder influence and can impact long-term control of the company.

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What Is Class A Stock?

Class A stock typically grants shareholders greater voting rights compared to other share classes. When companies issue stock, they may create different classes with varying privileges, with Class A often being the most powerful. These shares give investors a say in electing board members or approving major business changes.

The primary distinction of Class A stock is its enhanced voting power. Class A shares could entitle holders to multiple votes, sometimes 10 or more per share. This structure enables founders, executives or early investors to maintain control even if they don’t own the majority of outstanding shares.

What Is Class B Stock?

Class B stock typically carries different voting rights and privileges compared to Class A shares of the same company. However, Class B shares typically maintain equal economic rights to Class A shares. This means holders of both classes generally receive the same dividends and have identical claims to company assets.

These differences usually influence corporate governance more than returns, though exceptions exist. Companies sometimes grant more voting rights to Class B shares than to Class A shares. In these cases, Class B shares are typically held by founders, executives or insiders and can carry enhanced voting power—often 10 votes per share or more—while Class A shares, which are usually held by the public, might carry just one vote per share.

Investors should always carefully review a company’s specific share structure before investing.

Class A Stock vs. Class B Stock: Key Differences

Class A and Class B shares represent ownership in the same company but differ in several key ways. These differences often include voting power, trading volume, share price, conversion options and dividend policies—factors that can influence both control and investment value.

Voting rights: Class A shares typically come with superior voting power. This structure allows founding members or executives to maintain control of the company even if they don’t control a majority of shares.
Trading liquidity: Class A shares are generally more actively traded on major exchanges. The higher trading volume means investors can buy or sell these shares more easily, potentially with narrower bid-ask spreads compared to their Class B counterparts.
Price differences: Despite representing ownership in the same company, Class A and Class B stocks often trade at different prices. This price gap reflects the market’s valuation of the additional voting rights and policies of each class.
Conversion privileges: Some companies allow Class B shares to convert to Class A shares under certain conditions. These conversion rights can significantly affect the long-term value proposition of holding one class over another.
Dividend policies: In some cases, companies structure their share classes with different dividend rights. One class might receive higher dividend payments or even get them earlier.

Companies With Class A and Class B Shares

Alphabet Inc., the parent company of Google, and Berkshire Hathaway offer clear examples of how Class A and Class B shares differ.

Alphabet’s Class A shares trade under the ticker GOOGL and come with one vote per share, giving investors some say in corporate decisions. Company insiders primarily hold Class B shares, which carry 10 votes per share, allowing Google’s founders and executives to retain control.

The company also issues Class C shares under the ticker GOOG, which have no voting rights. This three-tier setup lets Alphabet raise capital from the public but preserve strategic control among insiders. The price difference between GOOGL and GOOG shares can vary slightly based on the perceived value of voting rights.

Berkshire Hathaway is another high-profile company that offers two classes of stock: Class A (BRK.A) and Class B (BRK.B). Class A shares are significantly more expensive and come with full voting rights—each share counts as one vote. Class B shares are more affordable and carry only 1/10,000th of a vote per share.

While both classes represent ownership in the same company and benefit from Berkshire’s performance, the company introduced Class B to make the stock more accessible to retail investors. Class B shares include a 1,500-to-1 conversion option from BRK.A. However, investors cannot convert BRK.B back to BRK.A.

Mutual Fund Share Classes vs. Stock Share Classes

Class A and Class B mutual fund shares differ in how fees are structured, rather than in ownership rights or voting power, as is the case with stock share classes. Unlike class distinctions in stocks—where differences often relate to voting rights and control—mutual fund share classes primarily impact the cost of investing. These structures allow investors to choose based on how long they plan to stay invested and how they prefer to pay fees.

Class A mutual fund shares typically charge a front-end load, meaning investors pay a sales commission when they buy in. These shares may also offer lower annual expenses, making them more cost-effective for long-term investors.

Class B shares, by contrast, often come with a back-end load or deferred sales charge that applies when shares are sold. They usually have higher annual expense ratios and may convert to Class A shares after a holding period of several years.

FAQs: Class A Stock vs. Class B Stock

Is Class A or B stock better?

Neither Class A nor Class B stock is inherently better—it depends on your priorities. Class A shares often offer more voting rights and liquidity, while Class B shares may come with lower prices or different dividend terms. Investors should weigh control, cost, and long-term goals before choosing between them.

Do Class B shares have voting rights?

The specific voting power of Class B shares varies by company. In some corporations, Class B shares might carry one-tenth the voting power of Class A shares.

Do Class B shares count toward the company’s market cap?

Class B shares absolutely count toward a company’s market capitalization. Companies like Alphabet (Google’s parent company) have multiple share classes factored into their total market capitalization.

What class of shares do I want?

The truth is there is no one-size-fits-all answer to this situation. You may want to talk to a financial advisor to help you make the right choice for your portfolio.

Bottom Line

Understanding the differences between Class A stock and Class B stock can help investors navigate today’s complex market. While both represent ownership in a company, they often come with different voting rights and privileges. Class A shares typically carry more voting power, allowing holders greater influence over corporate decisions, while Class B shares may offer economic benefits but limited control. Before investing, carefully review a company’s share structure to understand what rights you’re purchasing.

Investing Tips

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