John Melloy’s article entitled “The Dictators of Silicon Valley: Facebook, Google Stripping Shareholder of Power” highlights an interesting trend among tech companies that have gone public in the past several years – implementing dual-class voting structures. The general idea behind these dual-class voting structures is to keep control in the hands of the individuals (usually the founders) who supposedly know what is best for the company and to shield a company from potential public company shareholder activism and hostile takeovers. Control is maintained by either giving the founder shares more votes per share than the shares issued to the public (or issuing non-voting shares to the public) – for example, founders would hold Class B common stock entitled to 10 votes per share, while the general public would hold Class A common stock entitled to one vote per share.
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