Investors Urge Exchanges To Phase Out Dual-Class Voting

Law360 (October 24, 2018, 8:48 PM EDT) -- An investor group on Wednesday petitioned both major stock exchanges to require issuers that use so-called dual-class share structures, which grant outsize voting power to company founders, to phase out such arrangements within seven years after the initial public offering, arguing that unequal voting systems deprive shareholders of a say in corporate affairs.

The Council of Institutional Investors, which represents pension funds, endowments and other large investors, wants the New York Stock Exchange and Nasdaq to amend their listing rules so that sunset provisions become standard for public companies going forward.

Under dual-class share structures, companies grant additional votes per share to their...

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