Sen. Warren Urges NYSE, Nasdaq To Propose a ‘One-Share-One-Vote’ Rule
By Jimmy H. Koo
Sen. Elizabeth Warren (D-Mass.) June 5 sent a letter to New York Stock Exchange Euronext and Nasdaq OMX Group, urging them to consider proposing rules requiring a “one-share-one-vote” corporate structure for listed companies.
“I believe the investing public would benefit greatly if you issued proposals for public comment soliciting input on this most fundamental of corporate governance issues,” Warren said in the letter addressed to NYSE Vice President John Carey and Nasdaq Executive Vice President and General Counsel Edward Knight.
Warren recounted that in October 2012, the Council of Institutional Investors asked the exchanges to propose rules requiring companies to adopt a one-share-one-vote system. After reading the CII letter “with great interest,” Warren wrote the letter to the exchanges “to reiterate their call for action.”
“If a company goes to the public markets to raise money, long-term ordinary common stock investors–a category that includes directly or indirectly millions of retirees and workers–should be entitled to certain basic rights.” Warren said. “One of the most basic of those rights is one-share-one-vote,” she added.
According to Warren, a member of the Senate Banking Committee, unequal voting rights help to “entrench management and a board that can enrich themselves at the expense of the general investors.” The recent spike in the number of public companies using multi-class stock structures “underlines the urgency of issuing a proposal,” Warren said.
Spokesman for NYSE declined to comment and Nasdaq could not be immediately reached for comment.
To see Senator Warren’s letter, go to http://about.bloomberglaw.com/blaw2/files/2013/06/Senator-Warren-letter-to-NYSE-Nasdaq-6-5-2013.pdf.