Dollars and Jens
Tuesday, April 24, 2007
dual-class share structures
"New York Times Co. management said Tuesday they would not change the publisher's control structure ahead of an annual meeting where shareholders planned to protest its dual-class share system."
According to the Times, a total of 124.2 million Class A shares had been voted at its annual meeting in New York to approve four designated Class A directors on its board.I have some sympathy for the class A shareholders, and some intuitive sense that it's generally best that control be allocated in a manner roughly commensurate with the attendant economic risk, but there's a significant "coming to the nuisance" aspect to this, too, and I don't think a private company should be forbidden to sell off shares in future earnings without really, really "going public".
Under a dual-class share system, the Times is controlled by the Ochs-Sulzberger family, which appoints nine additional Class B directors to the company board.
On the other hand, claims that this structure helps preserve editorial independence are simple, straightforward hooey. Well, sure, it's independent of pressure from the public shareholders; instead, it's under pressure from the families.