Facebook Investors Can’t Remove Mark Zuckerberg. That’s a Problem
Founders get to eat their cake and keep it, even after their companies go public. And that’s causing long-term damage to investors.
It is a theme of recent high-profile, tech IPOs that founders keep control of their company through the use of share classes even after they go public. The list of companies that have floated with privileged voting power for their founders is long. Facebook, Snap and Lyft all went public with their founders still retaining control. Is this practice fair?
A multiple share class structure splits shares into different classes. A Class A share, for example, might have the voting power of 10 ordinary, or Class B, shares.
Though the financial benefit for owning a share remains the same, voting power is not. Though, in a futile attempt at better branding, it is often only Class A shares that regular folk can buy.
One place that has thought them not to be fair is London. Or was, depending on when you’re reading this. The financial capital of the world has long rejected multiple share…
