Shareholders’ Rights Update
In our March 15th blog, we commented on the apparent deterioration in shareholders’ rights in connection with the initial public offering of Snap, Inc. shares, which have no voting rights. This issue is garnering increased attention from institutional investors.
State Street Global Advisors recently urged the U.S. financial regulator to block companies from adopting controversial voting structures used by Facebook, Alphabet and Snap over concerns that they concentrate power in the hands of founders and weaken shareholder rights.
FTSE Russell, owned by London Stock Exchange Group PLC, has proposed a minimum threshold for the percentage of voting control in order to be included in FTSE Russell’s main indexes, like the Russell 3000 or Russell 2000.
For the record, Sigma is opposed to corporate strategies that limit or otherwise reduce public shareholders’ rights.
All comments and suggestions are welcome.
Walter J. Kirchberger, CFA®