The Pros & Cons of the Dual-Class Stock Structure: Two corporate governance experts battle it out.


Last year, Snap Inc., the parent company of mobile-mes saging app SnapChat, held a three-minute annual shareholder meeting via a webcast.

Atul Porwal, Snap's associate general counsel adjourned the meeting saying, "We did not receive any questions from our stockholders so this concludes today's meeting.

Holding a virtual shareholder meeting isn't new, but the brief nature of the gathering that was also short on any strategic plans, despite the SnapChat's decline in users in the most recent quarter, may have something to do with Snap's dual-class stock structure.

When Snap went public it did so using the first-ever solely non-voting stock model. The founders hold the voting power with each share worth 10 votes, as opposed to zero votes for those shares bought by outside investors.

It's a stock ownership structure that either undercuts shareholder influence and corporate governance or bolsters growth among innovative companies that don't want to be burdened by the short-term demands of...

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