Does stock lending affect corporate actions such as proxy voting and dividends?

Once the shares are lent out, you are no longer entitled to the corresponding voting rights of the shares. Generally, the lent shares will be recalled and returned to you (but not guaranteed) before dividends are paid. Even if the shares are not returned, you will still receive cash equal to any dividends earned. These payments are often referred to as “substitute” or “manufactured” payments, which are subject to different tax treatment from qualified dividends.