Last November, Broc wrote about efforts by some Silicon Valley heavy hitters to establish a new stock exchange for startup tech companies. While efforts to obtain regulatory approval for the new exchange hit a snag at the time, the SEC approved the application of the Long-Term Stock Exchange last Friday. A Reuters article summarizes some of the features of the new exchange that are designed to promote long-term thinking on the part of companies. Here is an excerpt of those features:
The new exchange would have extra rules designed to encourage companies to focus on long-term innovation rather than the grind of quarterly earnings reports by asking companies to limit executive bonuses that award short-term accomplishments.
It would also require more disclosure to investors about meeting key milestones and plans, and reward long-term shareholders by giving them more voting power the longer they hold the stock.
It’s that final point – time phased voting – that prompted the CII to file a letter opposing the LTSE’s application. While the CII doesn’t like “tenure voting,” a TechCrunch article notes that it’s an old concept that’s picked up a number of advocates in recent years. In the end, the SEC approved the application, noting that its rules do not mandate that an exchange impose a “one-share, one-vote” requirement on listed issuers.
-John Jenkins, TheCorporateCounsel.net May 17, 2019
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