Wednesday, February 1, 2017

Ban Dual-Class Shares?

Company founders have used dual-class share structures to retain voting control, even without a majority of the share ownership. Many tech companies have adopted such systems, with some being quite extreme. For example, Groupon founders own shares that provide them the equivalent of 150 votes per share, and Snap (parent of Snapchat) plans to go public and give common shareholders no voting rights. Money managers are beginning to band together in hopes of eliminating such structures. See article here, WSJ.