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Spencer Feldman Published in Law360 on Perpetual Dual-Class Stock

March 2, 2018

Olshan Corporate/Securities partner Spencer Feldman published an article in Law 360 on March 1, 2018, entitled “Commissioner Jackson's Take On Perpetual Dual-Class Stock.” In the article, Mr. Feldman analyzes and comments on a recent speech given by SEC commissioner Robert J. Jackson Jr. on perpetual dual-class share structures in newly public companies. “Dual-class share structures,” Mr. Feldman explains, “involve companies that have provided in their certificate of incorporation for at least two classes of authorized common stock: one called subordinate voting shares (e.g., one vote per share), and the other called multiple voting or supervoting shares (e.g., 10 votes per share).” While Jackson acknowledges the value of a dual-class structure in providing a company long-term stability, he nonetheless questions the "forever-ness" of the structure to engender a “corporate royalty” that is not only un-American but that is also inviolable to “democratic accountability.” Moreover, companies using a dual-class structure are sometimes omitted from major market indices, to the exclusion of the many middle-class investors who own stock through an index. Mr. Feldman concludes his article by pointing out that, while Jackson’s views are vital to the debate over perpetual dual-class stock, “SEC commissioners are not normally permitted to speak about matters currently pending before the SEC and, therefore, it may be assumed the SEC is not currently considering taking steps to discourage adoption of perpetual dual-class stock with unequal class voting powers.”      

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