Summary

Requires companies that have multi-class share structures to disclose, in their proxy or similar filings, the percentage of shares voting in director elections owned by each covered person and the percentage of total combined voting power they hold. Defines “multi-class share structure” as any capital structure with two or more types of securities that carry different voting rights and directs the SEC to adopt rules implementing the disclosure requirement.

Key Points

• Requires disclosure in proxy (or similar) filings for issuers with multi-class share structures of each covered person’s percent of shares voting in director elections and percent of total voting power.
• Defines multi-class share structure as any capitalization with two or more security types that have different voting rights.
• Directs the SEC to adopt rules specifying how the new disclosure requirement will be implemented and presented.
• Targets transparency about concentrated voting control (e.g., founders or holders of super-voting shares).
• Affects public companies with dual- or multi-class stock, their boards, founders/insiders, and investors and may influence investor stewardship and governance analysis.
• Creates compliance and reporting costs for affected issuers and may require changes to proxy-statement drafting and recordkeeping.
• Does not itself change voting rights or corporate law — it is a disclosure mandate, not a change to substantive shareholder rights.
• Could affect decisions by firms considering multi-class structures for IPOs by raising disclosure expectations.

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