Ford, Dow Jones and other special class B shares granting super-size voting rights draw harsh criticism, but they're not going away any time soonWho would give in first, the Fords or the Bancrofts? The members of the automobile dynasty and the clan behind The Wall Street Journal control their respective companies through supervoting, which in theory gives them iron-clad control while ordinary investors have to make do with reduced voting power. But recent developments, including Rupert Murdoch's whopping $60-per-share offer for Dow Jones (DJ) and press reports that some Ford family members want to sell off part of their stake in troubled Ford Motor (F), raise the question: Is the dual-class structure going the way of the dodo? (The Ford family has denied the report.)
The headlines have put a fresh spotlight on the perils of a dual-class voting structure for shareholders. Typically in these cases, a few people, such as company insiders or founding family members, have voting power far exceeding their financial stake in the company. This somewhat archaic structure—a frequent target of criticism from corporate governance experts and investors—continues to affect how deals transpire on Wall Street.
The Ford news, reported by Bloomberg on May 14, follows after Rupert Murdoch's News Corp. (NWS) made an astronomical $60-per-share bid for Dow Jones when the stock was trading at around $36 (see BusinessWeek, 5/14/07, "Crazy Like a Fox"). Both Dow Jones and News Corp., have similar stock structures, but the headlines continue to focus on Dow Jones because the controlling Bancroft family has declined to sell its stake to Murdoch for fear of how the owner of the New York Post and the racy British tabloid The Sun would change the esteemed business newspaper.
Read More
