Super Voting Stock

Extracted Attributes

• Definition

  A stock class whose holders have disproportionately larger voting rights than holders of other kinds of stock.

• Primary Purpose

  To give key company insiders greater control over voting rights, board decisions, and corporate actions.

• Takeover Defense

  Enables insiders to maintain majority voting control without owning more than half of the outstanding shares.

• Regulatory Status

  SEC authority to eliminate disparate voting is constrained by a 1990 DC Circuit Court decision.

• Common Voting Ratio

  Often 10 votes per share (e.g., Alphabet Class B) but can range up to 50 votes per share.

• Conversion Mechanism

  Super voting shares often automatically convert to single-vote shares when sold to the public.

Timeline

• Ford Motor Company implements a Class B structure where the superclass always controls 40% of the vote. (Source: CII Dual Class Companies List)

  1956-01-01

• The DC Circuit Court strikes down an SEC rule intended to eliminate disparate voting arrangements. (Source: Baker McKenzie: The revival of dual class shares)

  1990-01-01

• Fitbit goes public with a dual-class structure featuring 10-to-1 super voting rights. (Source: CII Dual Class Companies List)

  2015-01-01

• The Council of Institutional Investors (CII) updates its list of dual-class companies with unequal voting rights. (Source: CII Dual Class Companies List)

  2021-03-22

• Predicted implementation of a California Wealth Tax containing a punitive Super Voting Stock provision. (Source: All-In's 2026 Predictions)

  2026-01-01

Super-voting stock

Supervoting stock is a stock class whose holders have disproportionately larger voting right than holders of other kinds of stock. It enables a limited number of stockholders to control a company. Usually, the purpose of the super voting shares is to give key company insiders greater control over the company's voting rights, and thus its board and corporate actions. The existence of super voting shares can also be an effective defense against hostile takeovers, since key insiders can maintain majority voting control of their company without actually owning more than half of the outstanding shares. An example of a company that uses super-voting stock is Alphabet, the parent company of Google. It has three classes of shares: Class A, Class B, and Class C. Its Class B shares are super-voting shares, which confer 10 votes per share. They are only held by founders and insiders, and can't be publicly traded.

Web Search Results

• Super Voting Stock: What You Should Know | Cooley GO

  By issuing themselves super voting stock at incorporation, the founders can maintain voting control while still giving equity to employees. The challenge arises when the time comes to raise money, especially from VCs and other institutional investors. If things are going well, investors may agree to a high valuation and other company-friendly terms. But early on, they are unlikely to invest in a structure where one or two unproven founders completely control the company’s destiny. As a result, we often see super voting common stock structures unwound at the first round of VC financing, which adds time and expense to the transaction. Having this structure in place in an early stage company may even scare off investors who don’t want to engage with what they may, rightly or wrongly, [...] The most common way to implement super voting stock is to do so in advance of an IPO, sometimes a year or so before, but very often days before. The super voting shares are given to all pre-IPO holders and the single vote shares are sold to the public in the IPO. When pre-IPO holders start selling their shares to the public, those shares automatically convert from Series B (super vote) shares to Series A (single vote) shares. The result is that, as the shares that are sold convert from high-vote to low-vote stock, the largest pre-IPO holders who do not sell shares after the IPO will see their voting power increase, and thereby potentially control or significantly influence, any stockholder vote. Sometimes the structure will include a “sunset provision”, which ends the super voting [...] ### Super Voting Stock for Later-Stage Companies There are a number of high-profile public tech companies with super voting stock. With few exceptions, those structures have been implemented later in the company’s lifecycle. After the company has become successful and the founding team has proven themselves to be “visionaries,” investors may be more than willing, perhaps even enthusiastic, to implement super voting stock.

• Super-voting stock - Wikipedia

  Wikipedia The Free Encyclopedia ## Contents # Super-voting stock Supervoting stock is a stock class whose holders have disproportionately larger voting right than holders of other kinds of stock. It enables a limited number of stockholders to control a company. Usually, the purpose of the super voting shares is to give key company insiders greater control over the company's voting rights, and thus its board and corporate actions. The existence of super voting shares can also be an effective defense against hostile takeovers, since key insiders can maintain majority voting control of their company without actually owning more than half of the outstanding shares. [...] An example of a company that uses super-voting stock is Alphabet, the parent company of Google. It has three classes of shares: Class A, Class B, and Class C. Its Class B shares are super-voting shares, which confer 10 votes per share. They are only held by founders and insiders, and can't be publicly traded. ## See also ## References Wikimedia Foundation Powered by MediaWiki

• Supervoters and Stocks: What Investors Should Know About Dual ...

  The "supervoters," as some call them, are typically company founders and management, though the ranks of the supervoter might also include employees and pre-IPO investors. The dual-class structure allows them to exercise disproportionate control over the company by allowing multiple votes for every share owned. For example, supervoters might receive 10, or even 50, votes for every share owned while ordinary shareholders are still entitled to one vote per share. Dual-class structures were largely the province of media companies that sometimes said such structures were necessary to maintain journalistic integrity. [...] Login Need Help? | Check System Status Log In to other FINRA systems Stocks # Supervoters and Stocks: What Investors Should Know About Dual-Class Voting Structures The financial world of investing is filled with mathematical complexity, from the quantitative analysis behind certain trading strategies to the calculus used to determine the pricing of derivatives. But investors in most publicly traded companies can rely on one rather simple ratio: 1 to 1. That's the ratio that describes the voting structure at most companies: one share to one vote. When it comes to voting on everything from board member elections to whether the company should be sold, an investor who owns one share may cast one vote, an investor who owns 10 shares may cast 10 votes, and so on. [...] But that is only true in the so-called single-class share structure. In recent years, some high-profile initial public offerings (IPOs) have drawn attention to an alternative type of voting structure: dual-class voting structures. Under dual-class structures (and occasionally multi-class structures), certain shareholders get more voting power than others.

• [PDF] Dual Class Companies List

  structure, which can exacerbate classical principal-agent risks. A wedge of 100%, for example, would mean that the super-voting class of shares controls all of the voting power while representing none of the equity interest in a company. 1 Companies that use Up-C structures with two classes of outstanding shares but have no wedge between voting and equity interests are excluded here. Examples include: Empire State Realty Trust, Evercore Partners, Interactive Brokers Group, Malibu Boats, PBF Energy, PennyMac Financial Services, PJT Partners, RE/MAX, The Habit Restaurants, Virtu Financial, and Worldpay. 2 In many dual-class companies, insiders may own both super-voting shares and inferior-voting shares, making their personal wedge differ from the class wedge. Company Name Primary Ticker [...] Primary Ticker Unequal Voting Structure Superclass Control of Vote Superclass Equity Stake Difference (Wedge) Wedge As Of IPO Fitbit FIT Class A: 1 5/3/2019 2015 Class B: 10 58.29% 12.26% 46.03% Ford Motor F Class A: 1 4/26/2019 1956 Class B: always controls 40% of the vote 40.00% 1.78% 38.22% Gaia GAIA Class A: 1 4/29/2019 1999 Class B: 10 81.20% 30.17% 51.04% GAMCO Investors GBL Class A: 1 5/7/2019 1999 Class B: 10 95.68% 68.90% 26.78% GCI Liberty GLIBA Class A: 1 4/30/2019 2018 Class B: 10 30.53% 4.21% 26.32% Genesee & Wyoming GWR Class A: 1 5/9/2019 1996 Class B: 10 6.87% 0.73% 6.14% Genie Energy GNE Class A: 3 64.92% 5.81% 59.11% 5/10/2019 2011 Class B: 1/10 Globus Medical GMED Class A: 1 5/2/2019 2012 Class B: 10 74.55% 22.66% 51.89% GoPro GPRO Class A: 1 5/10/2019 2014 Class B: 10 [...] Updated March 2021 Dual Class Companies List The following US-incorporated companies have at least $200 million in market capitalization, at least two outstanding classes of common stock, and unequal voting rights that create a wedge between ownership and voting interests.1 Publicly listed foreign private issuers and special purpose acquisition companies are excluded from the list. This list derives from CII analysis of SEC filings. For each class of common stock with super-voting rights, the wedge is calculated as that class’s percentage of total voting rights minus that class’s percentage of total outstanding equity.2 The wedge quantifies the degree of misalignment between voting and economic interests created by the dual-class structure, which can exacerbate classical principal-agent

• [PDF] The revival of dual class shares | Baker McKenzie

  While the SEC’s rule-making authority in the context of voting rights is constrained by a 1990 DC Circuit Court decision which struck down a prior SEC rule making intended to eliminate disparate voting arrangements, Commissioner Robert Jackson has urged US exchanges to adopt rules designed to preclude companies with perpetual dual class voting structures from listing on the exchanges. Instead, Commissioner Jackson proposed that the exchanges should require companies with dual voting classes to adopt sunset provisions as a condition to listing. In his comments regarding current practice, Commissioner Jackson noted that perpetual super voting shares that put “eternal trust” in the hands of insiders is “antithetical to our values as Americans”. [...] 2| I F L R . C O M | S P R I N G 2020 US scrutiny In the US, offerings by companies with dual class structures and proposed restructurings which seek to implement similar arrangements following an IPO have served to reinvigorate a corporate governance debate that has been ongoing since the 1980s. Perhaps the market’s voice is getting louder with the critical spotlight recently thrown on WeWork’s super voting rights structure, which would have entrenched the voting power of its founder and CEO Adam Neumann. [...] In response to the recommendations of the Investor Advisory Committee, a bill has been introduced in Congress (the Enhancing Multi-Class Share Disclosures Act) that would enhance the disclosure obligations of issuers with respect to disparate voting structures. The enhanced disclosure would require companies to clearly show the difference between the voting power and economic rights of a shareholder or group of shareholders owning super voting shares.