Exchanges Should Ban Multi-Class Stock Listings, CII Says
The New York Stock Exchange and Nasdaq Stock Market should make companies that have multiple classes of stock with unequal voting rights ineligible for listing, the Council of Institutional Investors said.
Companies with two or more kinds of common stock often concentrate voting power for founders, families or executives, the Washington-based nonprofit group said in a statement. That can “foster less accountability” from boards and executives and increases the risks for investors, Anne Sheehan, director of corporate governance for the California State Teachers’ Retirement System, said in the release.
Twenty of 170 initial public offerings between January 2010 and March 2012 were by companies with a multi-class, unequal voting stock structure, said CII, which represents pension funds, endowments and foundations.
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