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Leading Investor Group Rebukes SEC for Proposed Rules That Undercut Critical Shareholder Rights Leading Investor Group Urges Companies to Commit to Long-Term Executive Compensation Council of Institutional Investors Board Appoints Amy Borrus to Succeed Ken Bertsch as Executive Director Media Advisory: CII Fall Conference, September 16-18, Minneapolis Council of Institutional Investors Responds to Business
Roundtable Statement on Corporate Purpose
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Dual-Class Companies Without “Sunsets”
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Guide to Disclosure of Board Evaluation Processes
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New Report Details Practical Steps Corporate Boards Can Take to Combat Sexual Harassment CII Applauds SEC Commissioner Jackson's Call for Listing Standards to Require Sunsets on Dual-Class Stock CII Spring Conference, March 12-14, Washington. D.C. CII Announces Advisory Council Members for 2018 CII Report Highlights Risks Associated with a Common Chinese Corporate Structure Institutional Investors Oppose Stitch Fix Dual-Class Structure but Welcome Sunset Provision Uber’s Governance — Investor Response Do Not Disadvantage US Investors on Research,
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Minimum for Inclusion on Indexes
Investor Group Urges Blue Apron to Ditch No-Vote Shares Institutional Investors Dismayed by House Passage of
Financial CHOICE Act
CII, Institutional Investors with $4+ Trillion in Assets Oppose
Anti-Shareholder Provisions of the CHOICE Act
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Investor Group Urges Blue Apron to Ditch No-Vote Shares
“No-Vote Shares Have No Place in Public Companies”
“CII believes public companies should provide all shareholders with voting rights proportional to their holdings; newly public companies that do not should sunset the unequal structure over a reasonable period of time,” Ken Bertsch, CII’s executive director said in a letter to Blue Apron’s lead independent director, CEO and general counsel. “We strongly urge you to reconsider going public with a multi-class structure, or to incorporate sunset provisions that revert to one-share, one-vote within five years. And we urge that you make no use of Class C non-voting shares.”
Multi-class structures rob shareholders of the power to press for change when something goes wrong, which will happen sooner or later at most if not all companies. Shareholders will have no say in electing the directors who are supposed to oversee management.
Even worse is the prospect that Blue Apron could issue shares that give investors no voting rights at all. “CII and many investors are concerned that triple-class structures that include no-vote shares could become the model for companies tapping the public markets for the first time,” Bertsch said. “Non-voting shares are a perpetual-control device that lets founders hang onto their power over the company even as their economic stake shrinks. No-vote shares have no place in public companies.”
In March, Snap Inc. became the first U.S. company in recent years to go public by issuing non-voting shares. But several companies—including Google parent Alphabet, Facebook, Under Armour and Zillow—have non-voting share classes. CII and many institutional investors have urged the main providers of stock market indexes—FTSE Russell, MCSI and S&P Dow Jones—to bar non-voting share classes from their indexes. All launched consultations seeking public comment on the eligibility of no-vote shares in indexes. View CII’s response to FTSE Russell here, and CII’s response to S&P Dow Jones here. CII has not yet filed comments in response to MSCI’s consultation.
Click for PDF version. For media inquiries, please contact CII Editor Rosemary Lally.