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Comment by drocer88 | Hacker News Reader

Actual reason is Tesla has multiple class shares: https://www.dividend.com/news/2017/11/03/companies-multiple-...

"On July 31 [2017], S&P Dow Jones Indices, the outfit that oversees the S&P 500 and its constituency, announced that it would take steps to exclude companies with multiple share class structures. ... The move comes amid blowback from investors who have complained about company practices that are designed to keep majority, or total, voting control in the hands of its management and founders"

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This is very interesting. However, it doesn't appear this rule is applied consistently as Facebook is in the S&P500 and is probably the most infamous example of a multi-class share structure.

Facebook is grandfathered in, having been added in 2013. Although the linked article says the following:

> Companies with multiple share classes already in one of the indices will have until September 2022 to change their structures or face removal.

That's not S&P -- that's FTSE Russell [1]:

> For existing constituents, the rule will apply with effect from September 2022, thus affording a five year grandfathering period to allow constituent companies to change their capital structure if they so wish.

From my reading, S&P has not yet announced a similar policy.

[1] https://research.ftserussell.com/products/downloads/FTSE_Rus...

Facebook joined in 2013. Social Media Valley companies already in the S&P 500 were allowed to remain.

I guess it would apply to Alphabet as well

Funnily enough one of the owners of S&P Dow Jones Indices is News Corp, which itself has a multiple share class structure (and is in the S&P 500).

Great. There is no point in "shares" without votes.

I mean, dividends no? I would wager that most people care more about investment income than voting to approve a board member they probably never heard of.

For the individual you are correct, which is why companies haven't had much trouble getting people to buy non-voting stock.

But for the system as a whole, it's pretty important that the shareholders have the ability to vote for board members who will protect their interests, even if the power doesn't get used very often. That's why the SP committee is pushing back against multiclass shares...if the company's management controls the voting shares then they control the board which is supposed to be overseeing them, removing even a vague threat of accountability in a system that's already far from perfect.

The dividends that Facebook, Google, Netflix, Tesla and so on have never paid?

Of course it's rational enough from the CEO's perspective - if your shareholders don't have any leverage over you, why would you give them money?

Facebook and Google have both bought tens of billions of dollars worth of their stock back which is effectively just dividends that are reinvested for you.

Define "ownshership." These are supposedly publicly-owned entities. What does that even mean if the public has no control or say in how the entity is managed?

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