Snap Judgment: The Legal and Investment Issues Associated with Non-Voting Stock

Past Events

Tuesday, April 24, 2018, 9:30 AM to 1:00 PM @Gore Recital Hall, CFA : 

Co-sponsored with Cadwalader, Wickersham & Taft LLP

While dual-class stock has existed at companies for some time, Snap’s issuance of non- voting stock has raised new concerns. The corporate governance and legal implications have been at the forefrontof the investor, regulator and governance conversation for the better part of the past year. Using Snap as a backdrop, we invite you to a roundtable discussion on issues and questions regarding the use of stock with limited or no voting rights, such as: the benefits and risks posed by such shares; the effect on good corporate governance; the effect on capital formation; and whether the courts’ application of the business judgement rule to director conduct in such organizations remains appropriate. These are issues that apply both to companies with non-voting shares and to dual-class stock companies. This roundtable, comprised of experts from all sides of the debate, will discuss these and other related issues.

The confirmed participants are:

  • Donna F. Anderson, Vice President and Head of Global Corporate Governance,   T. Rowe Price
  • James Andrus, Investment Manager, CalPERS Investments, Execution Services & Strategy
  • David J. Berger, Partner, Litigation, Wilson, Sonsini, Goodrich & Rosati
  • Ken Bertsch, Executive Director, Council of Institutional Investors
  • Richard M. Brand, Partner and Co-Chairman of the Corporate Group, Cadwalader, Wickersham & Taft LLP
  • P. Clarkson Collins, Jr., Partner and Chair of the Litigation Practice Group, Morris James LLP
  • Craig K. Ferrere, Former Edgar S. Woolard Fellow in Corporate Governance, John L. Weinberg Center for Corporate Governance
  • George S. Georgiev, Assistant Professor of Law, Emory University School of Law
  • Henry T.C. Hu, Allan Shivers Chair in the Law of Banking and Finance, University of Texas Law School
  • The Honorable Gary F. Traynor, Justice, Delaware Supreme Court
  • Moderator: Charles M. Elson, Edgar S. Woolard, Jr., Chair of Corporate Governance; Director of the John L. Weinberg Center for Corporate Governance; and Professor of Finance

Program Materials

1.  Snap’s Not Looking to Chat with Shareholders” by Charles Elson and Craig Ferrere, Directors & Boards, Fourth Quarter 2017

2. “Unequal Voting and the Business Judgment Rule” by Charles Elson  and Craig Ferrere, Harvard Law School Forum on Corporate Governance and Financial Regulation (April 7, 2018)

3.  T. Rowe Price Proxy Voting Guidelines

4. Henry T. C. Hu and Bernard Black, Equity and Debt Decoupling and Empty Voting II: Importance and Extensions, 156 University of Pennsylvania Law Review 625-739 (2008)

5. “Putting the spotlight on Spotify: Why have stocks with unequal voting rights outperformed?”, Dimitris Melas, Managing Director and Global Head of Core Equity Research, MSCI Blog (April 2018)

6.  CII Dual Class Companies List (as of January 2018)

7.  CII Time-Based Sunset Approaches to Dual-Class Stock (March 27, 2018)

8.  CII Explainer of Academic Literature on Multi-Class Structures and Firm Value (April 11, 2018)

9.  “Are Dual-Class Companies Harmful to Stockholders? A Preliminary Review of the Evidence,” David J. Berger (Wilson Sonsini) and Laurie Simon Hodrick (Stanford law School), , Harvard Law School Forum on Corporate Governance and Financial Regulation (April 15, 2018)

10.   Recommendation of  the SEC’s Investor Advisory Committee Dual Class and Other Entrenching Governance Structures in Public Companies

11.   Speech by SEC Commissioner Robert Jackson, “Perpetual Dual-Class Stock: The Case Against Corporate Royalty” (February 15, 2018)

Related Articles

“The Pros & Cons of the Dual-Class Stock Structure: Twocorporate governance experts battle it out,” Directors & Boards, Augsut 16, 2018