Tenure Voting and the U.S. Public Company
David J. Berger, Steven Davidoff Solomon, and Aaron Jedidiah Benjamin, 72(2): 295-324 (Spring 2017)
Many believe that today’s public markets pressure companies to focus on short-term gain at the expense of long-term value. One way to address this concern is through the corporate capital structure. A “tenure voting” structure awards long-term stockholders more votes per share than short-term stockholders. We explore how such a model might impact short-termism, and how it compares to existing “one share, one vote” alternatives, such as dual-class and multi-class stock. Our objective is to provide an initial roadmap of legal and practical considerations for companies considering this innovative capital structure.