NEW YORK—A US House of Representatives panel plans to discuss a draft bill requiring companies that go public with dual-class stocks to sunset the structure after seven years, according to a copy of the proposed law published late Thursday. has created.
Dual-class share structures, which give more voting power to some shareholders, are not favored by investors but are popular with fast-growing technology companies. US investors have been pushing companies to leave the structure for years, but have stopped short of investing in those firms.
The draft bill targets newly public companies, and social media companies such as Facebook Inc. and Snapchat parent Snap Inc. will be grandfathered in. The bill allows the dual class structure to be maintained for an additional seven years if a majority of the shareholders in each class approve it.
Shareholder advocacy group Institutional Investors Council wrote to the committee on Friday in support of the bill, along with the New York State Controller, which oversees $268 billion in public pension money, and the Ohio Public Employees Retirement System (OPERS), of $113. With billions in assets under management.
OPERS wrote in the letter that divestment from companies with dual-category stocks eliminates the “possibility of any constructive dialogue” that may take place with the firms.
The bill also calls on companies to disclose the racial and ethnic diversity of their boards and executive officers. The US Securities and Exchange Commission is already planning to implement a similar rule.
by Jessica Dinapoli
This News Originally From – The Epoch Times