Institutional Investors Want To Get Rid of Dual Class Stock

For all you entrepreneurs that want to maintain control of your company by using two classes of stock (voting or super-voting shares for you, non-voting or low-voting shares for your investors), take notice.

The Wall Street Journal is reporting that the large money managers are making a big push to ban dual class shares.

This might not matter for a startup, but as the company matures and seeks professional institutional money, it will find that the guys like Vanguard and T Rowe Price will not look at you.

This group is also opposing “staggered” boards of directors.

The idea is to make companies more “stockholder friendly” and take control from the insiders.
https://www.wsj.com/articles/big-investor-group-to-push-for-end-to-dual-class-shares-1485817380

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About JeffKoeppel

I am a corporate/securities attorney in the Washington, DC area. Prior to joining the firm, I was a Senior Attorney Advisor in the Division of Corporation Finance at the U.S. Securities and Exchange Commission. I am a member of the Bars of the States of Maryland, New York and the District of Columbia. You can also follow this blog on LinkedIn at: http://www.linkedin.com/pub/jeffrey-a-koeppel/0/63/5a9
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