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Comment by rit | Hacker News Reader

This is an incorrect title; the wrong conclusion may have been drawn.

Although he has given them majority shares they are nonvoting only. The terms of.the gift forbid them from selling the shares or participating in any management or governance of the company.

Bose is remaining a private / independent company still run by said founder. This is essentially a gift that should pay nice stock dividends for MIT.

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Can't the remaining shareholders vote to suspend dividend payments indefinitely?

Yes, but they themselves wouldn't then receive dividends. They could route cash to themselves by issuing other capital instruments, but the corporate by-laws and / or charter should protect minority equity against this. This sort of thing is why you want good lawyers up front.

The likelier problem is management controlling the board and creeping up exec comp.

There will always be a trade-off between dividend payments and re-investment, but presumably here the voting equity's interests are basically aligned with the non-voting minority.

No; something akin to minority shareholder rights applies.

It's interesting that they're expected to just take what is given to them and not try and not be allowed to control their financial income.

They don't have to take it.

Those were the conditions under which the gift was offered. They are controlling their financial income by choosing to accept the gift, which gives them revenue from dividends. It's very similar to how a trust fund operates.

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