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Shareholder Rights: The Latest Salvo

Sigma Investment Counselors

August 11, 2017

In recent blogs we have noted that there has been an increase in large investor concerns over a trend toward a reduction in shareholders’ rights.

Now we have the managers of the S&P 500 taking a stand in favor of shareholders’ rights by announcing a new policy that would bar new admissions to the index to companies with multiple classes of shares.

Barring index entrance to companies with multiple classes of stock means that their stock price won’t benefit from the forced buying from popular S&P index funds.

Whether this will cause company managers to reconsider the advantages of multiple classes of shares remains to be seen.

We at Sigma have consistently, when given the opportunity, voted against multiple classes of stock.

All comments and suggestions are welcome.

Walter J. Kirchberger, CFA®

 

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