Tenure Voting and the U.S. Public Company

Abstract

This paper examines an innovative response to the rise of dual-class stock: the use of tenure voting by U.S. public companies. Tenure voting is the award of an additional number of votes to shareholders depending upon the duration of their ownership. Tenure voting has the potential to be a more palatable alternative to high-vote and no-vote shares while also addressing current arguments about long- and short-termism in U.S. markets.

This paper outlines the mechanics of tenure voting; discusses policy reasons for and against this voting mechanism; and explores the legalities of the adoption of tenure voting by currently listed U.S. public companies. It is intended as a resource and guide for those U.S. public companies considering this innovative voting mechanism.

Keywords: tenure voting, one-share one-vote, dual class stock, corporate governance, stock exchange rules