CII urges IPO companies to reconsider dual-class structure

By John Filar AtwoodThe Council of Institutional Investors (CII) has written to the boards of Pivotal Software and Vrio, both of which are preparing their IPOs, urging them to reconsider using a dual-class structure as a public company, or alternatively to incorporate sunset provisions that revert to one share, one vote within seven years. CII believes that the dual-class structure severely limits a company’s accountability to public shareholders over the long-term.CII noted that without the dual-class structure, Dell already owns in excess of 70 percent of Pivotal’s outstanding shares, and AT&T owns in excess of 83 percent of Vrio, which is enough to exercise control in the near-term. Due to the dual-class structure, Pivotal public shareholders will control just four percent of the voting power despite owning 30 percent the company. CII noted in the Vrio letter that its public shareholders will control less than two percent of the voting power despite owning 17…

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