S&P Policy Unlikely To Thwart Multiclass Stock Structures

Law360, New York (August 3, 2017, 8:18 PM EDT) -- The decision by the S&P 500 index manager to ban companies with multiple-class stock arrangements that reserve extra voting power for insiders won't stifle future public companies from establishing such structures, experts say, though it could dampen enthusiasm.

The S&P 500 policy change comes amid pushback from some investor groups who argue that multiple-class structures undermine shareholder rights, a criticism that escalated after social media giant Snap Inc. this year became the first company to go public issuing no-vote shares.

Under the S&P Dow Jones Indices' new policy, which was made effective Tuesday, several indexes it manages, including the famed S&P...

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