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> Yes, but this is far out of the context of this discussion Facebook's multi-class-voting share structure is an artifact of Delaware corporate law. The DGCL c
by rmrfstar 6y ago
> Yes, but this is far out of the context of this discussion
Facebook's multi-class-voting share structure is an artifact of Delaware corporate law. The DGCL changes all the time.
The fact that some group of investors agreed to that structure in 2012 does not mean that Delaware is obligated to lend its coercive power to enforce it in perpetuity. In fact, Delaware is under increasing pressure to void such arrangements by amending its corporate law [1].
[1] https://corpgov.law.harvard.edu/2019/09/24/letter-to-delaware-state-bar-association-limiting-multi-class-voting-structures/ https://corpgov.law.harvard.edu/2019/09/24/letter-to-delawar...
- justinmeiners 6y agoI did not know this particular policy was under scrutiny. Could this be handled at the exchange level? Can they set voting requirements for the kinds of stocks they will make available? Is there an SEC angle to this as well in how they classify public companies? It just seems very weird to me that a particular business arrangement which is well-understood and non-predatory would need to be outlawed.
- rmrfstar 6y ago"Need to be outlawed" and "government does not enforce" are different things. Example 1: California will not enforce non-compete covenants. What it means to enforce such covenants is that company A can have police physically prevent you from working for company B if company A requests such intervention. Refusing to grant that privilege to company A is not outlawing anything. Example 2: There is a 300 year old legal doctrine called "the rule against perpetuities" whose history and rationale may answer some of your questions. [1] [1] https://en.wikipedia.org/wiki/Rule_against_perpetuities https://en.wikipedia.org/wiki/Rule_against_perpetuities