A panel in the U.S. House of Representatives in New York plans to discuss a draft bill that would require companies to go public with dual-class stocks to have their structure sorted out after seven years.
The dual-class share structure, which gives some stockholders the ability to vote more, is not favorable among investors, but popular with fast-growing technology companies. U.S. investors have been pressuring companies for years to abandon the structure but have stopped investing in those companies.
The draft bill targets new public companies, and will be the grandfather of social media companies such as Facebook Inc. and Snapchat’s parent Snap Inc. Approves it in every class.
Shareholder Advocacy Group Council of Institutional Investors wrote to the committee on Friday in support of the bill, including the New York State Controller, which oversees 26 268 billion in public pension funding and the management of the Ohio Public Employees Retirement System (OPERS).
Uppers wrote in the letter that the separation from companies, including dual-class stocks, excludes the possibility of any constructive dialogue with companies.
The bill calls on companies to disclose ethnic and racial diversity to their boards and executives. The US Securities and Exchange Commission is already planning to implement similar rules.
By Jessica Dinapoli
This News Originally From – The Epoch Times