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1990, Viacom Inc., a prominent media company, adopted a dual-class capital structure, consisting of two classes of shares with differential voting rights.
At the other extreme, a solution that would recognize the importance of voting power would be to exclude all companies that offer differential voting rights from equity indexes.
Finally, we test and reject a series of alternative hypotheses, including dual class share structures, differential voting and cash flow rights, corporate opacity, and managerial overconfidence.
It is time for the SEC to revisit with U.S.-based stock exchanges the rules on new offerings of multi-class common structures with differential voting rights.
The challenge for index construction is to include differential voting rights shares in the index to maintain comprehensive coverage of the equity universe, while appropriately reflecting the reduced voting power characteristics of these securities in index weights.
It enables indexes to continue to capture all investable equity securities and offer all investors the possibility of benefitting from the growth prospects of new companies that may have elected to offer differential voting rights.
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These differential vote tallies were most common for corporate political spending resolutions: seven of the nine proposals that earned 40percentt or more of the shares cast in favor were on political activity.
The most important issue in corporate governance today is dual class capitalization, and the most important recent development is the petition submitted on October 24, 2018 by the Council of Institutional Investors ("CII") to both the New York Stock Exchange and Nasdaq, asking them to place a "sunset" on differentials in voting rights.
But the wait may be even longer: if the vote differential between the candidates is less than one-half of 1percentt, which appears very likely, an automatic recount will be triggered, and may spill into December.
We use a field experiment to measure differential information provision about voting by local election administrators in the United States.
These results are surprising because voters may anticipate and strategically respond to the differential pivot probabilities by voting insincerely.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com