Title

Adam Neumann planned for his children and grandchildren to control WeWork

Though many public shareholders may not realize as much, a growing number of tech founders enjoy the kind of dual-class shares that Neumann had extracted from investors, shares that don’t merely give founders more voting power for a while after their companies go public or even throughout their lifetimes, but whose power can be passed down to their children, too.

We wrote about this very issue as a kind of hypothetical last month, quoting SEC Commissioner Robert Jackson, a longtime legal scholar and law professor, who told an audience last year that nearly half of companies that went public with dual-class shares between 2004 and 2018, gave corporate insiders “outsized voting rights in perpetuity.”

It raises the prospect that control over our public companies, and ultimately of Main Street’s retirement savings, will be forever held by a small, elite group of corporate insiders — who will pass that power down to their heirs.”

Giving founders super-voting shares for some period after transitioning onto the public market, we can understand.

Full Article