Columbia Law School
Sky Blog
While unequal voting structures in the U.S. are commonly associated with technology and media companies, there is no such industry specific tendency in Europe – with its tradition of so-called “loyalty shares” and government ownership. This paper surveying dual class
dual class shares
Dual Class Shares in the Age of Common Ownership
Mark Zuckerberg has virtually all his personal wealth invested in Meta Platforms (formerly Facebook). His incentives as controller of Meta are thus clear: Maximize firm value and private benefits of control, irrespective of the effect that might have on other …
Discretionary Decision-Making and the S&P 500 Index
Discretion is an integral part of how indices, including stock market indices, are constituted, according to professors Rauterberg and Verstein and Robertson (here and here), and the S&P 500 index is no exception.
The S&P 500 is a …
The Myth of Dual Class Shares: Lessons from Asia
Companies with dual class shares have, as the term suggests, two (or more) classes of common stock. One class gives its holders voting power proportionate to their equity shareholdings. The other offers a group of shareholders, normally corporate insiders, weighted …
More Than Meets the Eye: Reassessing the Empirical Evidence on U.S. Dual-Class Stock
Since Google (now Alphabet) issued dual-class stock at its IPO in 2004, the subject has been vigorously debated throughout the world. Unlike firms whose shares all have equal voting rights (“one-share, one-vote firms”), companies with dual-class stock allow a founder …
Designing Dual Class Sunsets: The Case for a Transfer-Centered Approach
Dual class capital structures have spread exponentially in recent years across much of the corporate world, as has previously been reported on this blog. Dual class listed companies today account for around $4 trillion of US total stock market value …
Quality Shareholder Voting
This post lays out a new approach to shareholder voting designed to increase the voting power of long-term committed shareholders: adding votes to shares based on both long holding periods and high concentrations. Called quality voting, the approach would …
SEC Investor Advocate Calls Dual-Class Shares a Recipe for Disaster
Thank you, Kerrie Waring, for your kind introduction. I appreciate the opportunity to speak at a conference where you will spend the next two days discussing the stewardship responsibilities of shareholders.[1] I know you take those responsibilities seriously, and
The Puzzling Case of the WeWork Non-IPO
The dramatic implosion of the IPO of The We Company, parent of office-sharing firm WeWork, (the “WeWork IPO) has attracted intense scrutiny across the business community. For scholars and practitioners who work at the intersection of law, business, and technology, …
What Comes After Shareholder Primacy? Employee Empowerment
In corporate law, the U.S. academic elite stubbornly clings to shareholder primacy as the foundational principle of the field. The concept is simple, even elegant: Shareholders should be given ultimate control of the corporation because they are entitled to the …
ISS Discusses Dual-Class Shares: Governance Risks and Company Performance
Initial public offerings of companies with dual-class shares have made headlines in recent years. An increasing number of newly listed companies have introduced classes of stock with superior voting rights, which typically allow company founders and top executives to maintain …
The Neglected Role of Justification Under Conditions of Uncertainty
A hot topic in corporate governance is the so-called short-termism of publicly held companies. In response to actual and anticipated pressure from activist hedge funds, companies are, some say, focusing too much on short-term gains by, for instance, shunning research …
The Case for Dual Class Shares
In recent times, the simmering feud between the church of the one share-one-vote and the heretic believers in shares with unequal voting rights has boiled over, particularly in the U.S.
The arguments pro and con this type of capital structure …
Dual Class Companies Should Adopt a Coattail Provision
I would like to make two points in response to Professor Coffee’s piece on dual class common stock.
First, American dual class companies should be obliged to include a “coattail” provision, as is the case in Canada. This provision, imposed …
The Demonization of Dual Class Shares
Symposium on Dual Class Stock
In his December 17 piece, “Dual Class Stock: What Is a Fair Compromise?,” Professor John Coffee asked readers to suggest alternatives to his proposal for limiting dual class shares. We are posting below three insightful responses from Columbia …
Dual Class Common Stock: An Issue of Public and Private Law
Against Mandatory Sunset for Dual Class Firms
The debate over dual class firms has morphed from an objection to their very legitimacy to a demand to subject them to a mandatory sunset provision. My colleague and friend, Professor John Coffee, believes that dual class firms are undesirable …
Why Investors Pay So Much for Dual Class Firms
Professor Coffee makes the insightful point that if founders receive a lower price for their stock when they retain voting control, it does not seem fair to allow other shareholders to take away that control without compensation. But, Professor Coffee …
A Brief Response
Forever is a long time — indeed, too long. That is the essence of my answer to my two friends and colleagues — professors Zohar Goshen and Joshua Mitts — who each argue against mandatory sunset provisions on super-voting stock …