Tenure Voting and the U.S. Public Company

30 Pages Posted: 3 Mar 2016 Last revised: 7 Aug 2019

See all articles by David J. Berger

David J. Berger

Wilson Sonsini Goodrich & Rosati

Steven Davidoff Solomon

University of California, Berkeley - School of Law; European Corporate Governance Institute (ECGI)

Aaron Benjamin

Wilson Sonsini Goodrich & Rosati

Date Written: 2016

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

Suggested Citation

Berger, David J. and Davidoff Solomon, Steven and Benjamin, Aaron, Tenure Voting and the U.S. Public Company (2016). Business Lawyer , Vol. 72, No. 2, 2017, Available at SSRN: https://ssrn.com/abstract=2740538 or http://dx.doi.org/10.2139/ssrn.2740538

David J. Berger

Wilson Sonsini Goodrich & Rosati ( email )

650 Page Mill Rd
Palo Alto, CA 94304-1050
United States
650-493-9300 (Phone)

Steven Davidoff Solomon (Contact Author)

University of California, Berkeley - School of Law ( email )

215 Boalt Hall
Berkeley, CA 94720-7200
United States

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

Aaron Benjamin

Wilson Sonsini Goodrich & Rosati ( email )

650 Page Mill Rd
Palo Alto, CA 94304-1050
United States

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