SEC official slams dual-class shares used by Alphabet, Snap

Alphabet, Snap and Facebook all have dual-share classes—a practice that has drawn criticism from investor advocates who say it can allow insiders to control companies for decades. Now a top official at the Securities and Exchange Commission (SEC) wants to prevent the next generation of tech powerhouses from following suit.

When going public, many companies have issued special share classes that give founders more power to pick board members and decide whether the business can be sold. SEC commissioner Robert Jackson Jr. said such unique shares should eventually expire and become ordinary stock, so that regular investors aren’t permanently at a disadvantage to “corporate royalty”.

While Jackson said that dualclass shares can have value, at least initially, he called for stock exchanges to develop a way for them to “sunset”.


Snap ratcheted up the controversy over dual-share classes last year when it offered no voting rights to investors in its $3.4-billion IPO. The company was made ineligible for the S&P 500 Index, limiting the ability of passive investment funds that track the benchmark index to own its shares.