CalPERS Suit Marks Another Loss For Multiclass Stock Plans
Blair Nicholas, Mark Lebovitch and Brandon MarshOctober 10, 2017, 1:49 PM EDT
Law360, New York (October 10, 2017, 1:49 PM EDT) -- Multiclass stock structures have suffered tremendous defeats of late. The recent case of California Public Employees' Retirement System v. IAC/InterActiveCorp illustrates how institutional investors can use litigation to successfully protect their voting rights, and recent actions by stock index provider S&P further diminish corporations’ incentives to pursue multiclass structures.
For decades, activist corporate founders and controllers have sought ways to entrench their positions atop the corporate hierarchy by granting themselves and other insiders “supervoting rights.” Such arrangements, known as “dual-class” or “multiclass” stock structures, diminish the voting...