By Alex Bullock
Next month, Berkshire Hathaway Inc. will hold their annual shareholders’ meeting in Omaha, Nebraska. Berkshire Hathaway’s annual shareholders’ meeting is a spectacle unlike any other, bringing investors from around the country (if not the world) to middle America for a weekend of free swag and corporate governance. Along with a 5k run, a movie screening, and endless corporate partner booths, the shareholders will take formal corporate action to vote to elect directors, to give an advisory vote on executive compensation plans, and to act on shareholder proposals, among other things. Berkshire Hathaway’s annual shareholders’ meeting is a significant event; indeed, I myself have thought about buying stock in the company just to see what their shareholder meeting is like in person. Continue reading
By Joe Davison
Background: Since its founding, Under Armour has maintained a dual-class stock structure consisting of Class A Stock, which has been entitled to one vote per share, and Class B Stock, which has been entitled to ten votes per share. Founder and CEO, Kevin Plank, beneficially owns all of the company’s Class B Stock and also owned a small portion of the Class A Stock. As of June, this provided Mr. Plank with 65.5% of the company’s total voting power, but only 16.6% of the total number of outstanding shares. Under the terms of Under Armour’s charter, if the aggregate number of shares of Class A Stock and Class B Stock owned by Mr. Plank is less than 15% of the total number of shares, the dual-class structure will unwind and all Class B Stock would be automatically converted in to Class A stock. This would result in Mr. Plank effectively losing control of Under Armour.
In November 2014, Mr. Plank reviewed his current ownership of Class B Stock with Under Armour’s Board of Directors and requested that the Board evaluate the creation and issuance of a class of non-voting common stock. The Board authorized a Special Committee to consider such a class of non-voting common stock, and to evaluate and make a recommendation to the Board as to whether and on what terms to proceed. The Special Committee recognized that the Company has been well-served by allowing Mr. Plank and management to focus on long-term value creation without distraction. Accordingly, the Special Committee informed Mr. Plank that it would recommend the creation of a Class C Stock and a Class C Dividend. The Dividend would distribute one new share of the non-voting stock for every existing share of Class A and Class B stock. This would allow shareholders to sell the Class C stock without losing any of their voting power. Continue reading