Dual-Class Stock: A Founder Favorite Faces Growing Investor Disapproval -

Earlier this year, the investment firm T. Rowe Price adopted new voting policies that penalize companies with dual-class stock structures. They join a growing chorus that includes the California Public Employees’ Retirement System (CalPERS) and Institutional Shareholder Services (ISS), which argue that these structures are undemocratic and constitute bad governance. Dual-class stock is designed to permit a strategic group of insiders, such as founders, management, and early investors, to maintain control. A number of high-profile, publicly traded technology companies, including Box, Facebook, GoDaddy, Alphabet (Google’s parent company), LinkedIn, and Yelp, have dual-class ownership structures.