Some of America’s largest businesses that have a major impact on almost every U.S. citizen and billions more internationally, are now governed by a dual-class structure that gives all of the voting power to the likes of Mark Zuckerberg.
Google and Facebook are the fourth and sixth biggest companies in the U.S. Both firms have share class structures with unequal voting rights. No way public companies this big and influential should be controlled by young founders without adult supervision.
Because the dual-class prevents shareholders from changing the structure though regular voting, big institutions in the asset management industry are lobbying the exchanges these firms list on to make changes. The WSJ reports that BlackRock, T. Rowe Price, and Calpers are pushing stock exchanges to require companies that want to be listed to do away with unequal voting rights within seven years of going public.
A group that represents a number of big investors submitted petitions Wednesday asking the New York Stock Exchange and Nasdaq Inc. NDAQ -0.20% to require companies with different share classes to get rid of unequal voting rights within seven years of going public.
The move is the latest attempt by large shareholders in U.S. companies to force a change they say will improve governance by giving shareholders voting rights in direct proportion to their ownership stakes. Some investors have long complained companies with multiple share classes grant a small handful of shareholders outsize voting power, leaving others with little say over corporate decisions. Others say this structure protects founders from unreasonable demands of investors.
Read more here.