Enhancing Multi-Class Share Disclosures Act
Enhancing Multi-Class Share Disclosures Act
Plain Language Summary
# Enhancing Multi-Class Share Disclosures Act (HR 3357) — Summary **What the bill does:** This bill requires companies with multi-class share structures to provide clearer information to investors about who owns what and how much voting power they have. Multi-class shares occur when a company issues different types of stock with unequal voting rights—for example, founders might own shares with 10 votes each while regular investors own shares with only 1 vote each.
The bill requires companies to disclose the share ownership and voting power of directors, executive officers, and major shareholders (those owning 5% or more of voting power) whenever they seek shareholder approval on matters. **Who it affects:** The bill primarily affects publicly traded companies with multi-class share structures (common among tech and media companies) and their investors. Investors would benefit from more transparent information about who controls the company and how voting power is distributed. **Current status:** The bill has passed the House of Representatives and awaits action in the Senate.
CRS Official Summary
Enhancing Multi-Class Share Disclosures Act This bill requires issuers of securities with multi-class share structures to disclose certain information in any proxy solicitation or consent solicitation material. A multi-class share structure occurs when a company issues two or more classes of shares that have different voting rights. For example, a company may issue one class of shares with no or few voting rights for the public, and another class with more voting rights for company founders and executives. Under the bill, the issuer must disclose certain information about each director, director nominee, named executive officer, and each beneficial owner of securities with 5% or more of the total combined voting power of all classes of securities entitled to vote in the election of directors. Specifically, the issuer must disclose (1) the number of shares of all classes of securities entitled to vote in the election of directors beneficially owned by such person, and (2) the amount of voting power held by such person.
Latest Action
Received in the Senate and Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.