In a paper titled, “The Importance of Inferior Voting Rights in Dual-Class Firms,” author Dov Solomon focuses on companies with a class of non-voting stock. By offering non-voting stock to the public and listing that class of securities on a national securities exchange, an issuer is not subject to a number of disclosure
Voting Structures
Do Founders Regain Control Through IPOs?
By Anna T. Pinedo on
Authors Brian Broughman and Jesse Fried study founder control in their paper titled, “Do Founders Control Start-Up Firms that Go Public?” In their paper, the authors observe that many founders of startups lose control through the process of raising capital from venture capital funds. The authors debunk the notion that founders regain control…
The Agency Costs of Equal Treatment Clauses
By Anna T. Pinedo on
Posted in Public Companies, Voting Structures
In his essay, referenced above, author Kirby Smith considers the effects of the equal treatment clause in acquisitions of companies with dual class structures. In the charters of many such companies, there are equal treatment clauses that require that any merger consideration be distributed pro rata. The presence of such a clause may make…
Comments Submitted in Response to MSCI Consultation
By Anna T. Pinedo on
Posted in Public Companies, Voting Structures
The MSCI released its Consultation on the Treatment of Unequal Voting Structures in the MSCI Equity Indexes soliciting input on index inclusion criteria relating to the shares of companies having a dual class structure. Many commenters have responded by releasing their views publicly. While many institutional investors have taken the opportunity to comment on their …