Published On: Sat, Oct 2nd, 2021

US House Panel Considers Bill Curbing Dual-Class Stock

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NEW YORK—A U.S. House of Representatives panel plans to discuss a draft bill requiring companies that go public with dual-class stock to sunset the structure after seven years, according to a copy of the proposed legislation published late Thursday. Dual-class share structures, which give some stockholders more voting power, are out of favor among investors, but popular with fast-growing technology companies. U.S. investors have been pushing companies to abandon the structure for years but have stopped short of not investing in those firms. The draft bill targets newly public companies, and would grandfather in social media companies such as Facebook Inc. and Snapchat parent Snap Inc. The bill also allows for the dual-class structure to remain in place for an additional seven years if a majority of shareholders in each class approves it. Shareholder advocacy group the Council of Institutional Investors wrote to the committee on Friday in support of …

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