Institutional Investors Seek Limits on Dual-Class Structures

On March 14, 2019, a group of institutional investors with $3.2 trillion in assets sent a letter to Lyft calling on it to eliminate its dual class share structure, noting that the structure “imposes a significant gap between those who exercise control over the company and those who have significant exposure to the consequences of that control.” The full text of the letter is available here. These efforts continue a general push by investors to impose limits on dual-class voting structures, including by putting pressure on regulators and exchanges. For example, in October 2018, the Council of Institutional Investors filed petitions with the New York Stock Exchange and NASDAQ Inc., calling on them to limit listings of companies with dual-class share structures – a move that was supported by BlackRock and T. Rowe Price Group Inc. The press release announcing these petitions is available here.